Government Approves Field Trials for Polymer Currency Notes

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Key takeaways

The government approved an RBI proposal under Section 25 of the Reserve Bank of India Act, 1934 to test 1 billion polymer notes each for Rs 10 and Rs 20 denominations.
Polymer banknotes use biaxially oriented polypropylene (BOPP) material and last 2.5 to 4 times longer than traditional paper notes.
Introducing polymer currency will help reduce India's annual expenditure of nearly Rs 5,000 crore spent on printing and maintaining paper notes.
The RBI currently destroys around 20 to 24 billion soiled paper banknotes every year under its Clean Note Policy.

The central government approved a proposal from the Reserve Bank of India (RBI) under Section 25 of the Reserve Bank of India Act, 1934.
This approval allows the RBI to introduce one billion pieces each of Rs 10 and Rs 20 polymer banknotes for field trials.

The government will issue polymer notes alongside existing paper notes rather than immediately replacing them.
Initial field trials will assess the cost, durability, security, environmental impact, and suitability of polymer notes for India's weather conditions before starting regular production.

Manufacturers make polymer banknotes from biaxially oriented polypropylene (BOPP) instead of traditional cotton-pulp paper.
These notes resist water, tearing, and damage much better than paper notes, featuring clear windows and security designs that make counterfeiting difficult.
Studies indicate that polymer banknotes last 2.5 to 4 times longer than standard paper currency.

India spends nearly Rs 5,000 crore every year to maintain its banknote stock and replace damaged currency.
Under the Clean Note Policy, the RBI destroys around 20 to 24 billion soiled paper notes annually.
Lower-value notes like Rs 10 and Rs 20 spoil quickly due to continuous public handling, making polymer notes ideal for lowering long-term replacement costs.