RBI Field Trials for Polymer Banknotes in Small Denominations

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The Union Government approved a proposal from the **Reserve Bank of India (RBI)** to test polymer banknotes in real-world conditions for **₹10** and **₹20** denominations.

The **Reserve Bank of India (RBI)** and its subsidiary, **Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL)**, are running this pilot program to test plastic polymer notes alongside traditional paper notes.
The **RBI** serves as the official regulatory authority for this project, while **BRBNMPL** acts as the dedicated manufacturing body.
This project aims to increase the life of low-value banknotes that tear easily, which will lower long-term printing costs and reduce environmental waste.

The trial focuses strictly on small notes of **₹10** and **₹20**, starting with **1 billion pieces** for each denomination.
Traditional Indian notes use **100%** cotton comber and linter fibers, whereas polymer notes use a non-porous plastic film that repels dirt and water.
Polymer banknotes last **2 to 6 times** longer than standard paper notes, so the government will need to print, transport, and destroy worn currency far less often.
These plastic notes will circulate alongside regular paper currency, and the government has confirmed that it will not scrap existing paper notes.
Research highlighted by the **International Monetary Fund (IMF)** shows that polymer notes lower global warming impact by **32%** and energy use by **30%**, and workers can melt old notes into plastic granules.

Under **Section 22** of the **RBI Act, 1934**, the **RBI** holds the sole legal power to print and issue currency notes across India.
The **Ministry of Finance** issues **₹1** notes directly, but the **RBI** Issue Department manages all **₹10** and **₹20** banknotes.

**Australia** launched polymer banknotes in **1988**, and around **60 countries** currently use plastic currency.
Countries like **Australia**, **Canada**, **New Zealand**, **Romania**, and the **United Kingdom** have converted all their main banknote denominations to polymer.