When will India introduce plastic notes? RBI Governor shares timeline
What's the story
The Reserve Bank of India (RBI) is gearing up to introduce plastic currency notes in the country. The move, which will be subject to successful field trials, is slated for the start of the next financial year. RBI Governor Sanjay Malhotra announced this during a media briefing after the Monetary Policy Committee (MPC) meeting on Wednesday.
Rollout plan
Polymer banknotes in ₹10 and ₹20 denominations
The RBI plans to roll out polymer banknotes in ₹10 and ₹20 denominations.
These new notes will be more durable than regular paper currency.
The move comes as part of the central bank's efforts to improve the efficiency and longevity of India's currency system.
However, it's worth noting that existing paper notes will continue to circulate alongside these new plastic ones.
Previous trials
Second attempt at introducing polymer notes
The introduction of polymer notes marks a second attempt by the RBI, having previously attempted in 2009 but was unsuccessful due to "technical difficulties."
If this latest trial is successful, the central bank may consider extending polymer notes to higher denominations like ₹100 and ₹500.
The high circulation volume and low monetary value of ₹10 and ₹20 make them ideal for testing purposes.
Testing phase
Pilot tests to assess durability and public acceptance
The pilot tests will help the RBI determine the durability of polymer notes, public acceptance, printing efficiency, and how easily counterfeiters can replicate their designs and security features.
The lower denominations also provide operational convenience as they are mostly distributed through bank branches rather than ATMs.
This allows the RBI to test these new notes without having to upgrade cash dispensers and recyclers immediately.
International adoption
Over 60 countries already using polymer banknotes
Polymer banknotes are already in use in over 60 countries, including Australia, the UK, Canada, New Zealand, Singapore, Malaysia, Thailand, and Vietnam.
Australia was the first country to introduce polymer banknotes back in 1988. Since then, many central banks have adopted this technology due to its durability and lower replacement costs.
The government has clarified that these new polymer notes will circulate alongside existing paper currency after successful trials.