Centre clears RBI proposal to test ₹10, ₹20 plastic banknotes
What's the story
The Indian government has approved the Reserve Bank of India's (RBI) proposal to conduct field trials of polymer banknotes in the ₹10 and ₹20 denominations. The move was announced by the Finance Ministry on Monday. The RBI had proposed issuing one billion pieces each of these new banknotes for testing, with plans for regular issuance if trials are successful.
Replacement plan
No plan to replace paper currency
The Finance Ministry clarified that the RBI plans to issue polymer banknotes along with existing paper-substrate ones. There is no plan to replace paper currency with these new plastic notes.
The central bank had earlier stated that international studies show polymer banknotes last much longer than their paper counterparts.
Digital impact
Polymer notes may not affect digital payments
The Finance Ministry also addressed concerns over the potential impact of polymer banknotes on digital payments. It said any effect could only be assessed after regular issuance of these notes.
The ministry stressed that banknotes and digital payment systems are complementary instruments for public use.
This clarification came in response to a question raised in Parliament about the introduction of plastic notes and their possible effects on currency circulation and digital transactions.