The Finance Ministry has approved the Reserve Bank of India (RBI) proposal for field trials of polymer currency notes of ₹10 and ₹20, the central government told Parliament on Monday. Minister of State for Finance Pankaj Chaudhary gave this information in a written reply in the Lok Sabha. However, the government clarified that this decision does not mean the end of paper notes. Polymer notes will run concurrently with existing paper notes and there is no proposal currently under consideration to completely replace paper notes with polymer notes.
**One billion polymer notes will be issued**
According to the government, RBI will issue one billion (100 crore) polymer notes each of ₹10 and ₹20 denominations as part of a field trial. These notes will be launched in the market on a trial basis to assess their performance in Indian conditions. The decision to release them on a large scale will be taken only when the trial is successful.
RBI says that polymer notes are more durable than traditional paper notes. Based on international experience, the central bank believes that they have a longer shelf life, making them a better option for cash-intensive countries.
**Why are polymer notes needed?**
RBI has also said that low value notes get spoiled quickly, leading to repeated printing and destruction of them. Polymer notes can mitigate this problem and reduce the costs associated with printing and replacing notes in the long run. Additionally, polymer notes can incorporate advanced security features – such as transparent ‘see-through’ windows and special security threads – which will help prevent the circulation of counterfeit notes.
Regarding the possible impact on digital payments, RBI said that it would be premature to draw any conclusions at this stage. Their assessment will be possible only after polymer notes come into regular circulation. The central bank believes that cash and digital payments complement each other and both methods will go hand in hand in the future. Minister of State for Finance Pankaj Choudhary, in a written reply in the Lok Sabha, again said that the government currently has no proposal to completely replace paper notes with polymer notes.
