The Government of India has approved RBI’s proposal to introduce RBI polymer notes of ₹10 and ₹20 for field trials. Due to this, the scheme announced more than a decade ago is being restarted. Also, the Central Government has made it clear that there is no proposal to replace the existing paper currency with plastic notes of RBI. ‘Bharatiya Reserve Bank Note Printing Limited’ (BRBNMPL), the currency printing arm of the Reserve Bank of India (RBI), has invited tenders (EoI) for printing plastic/polymer notes of Rs 10 and Rs 20 denominations.
However, as soon as this news came out, there was confusion whether paper notes would be banned in India forever? The government and RBI have clarified that at present there is no plan to ban paper notes. Let us understand in simple language what are plastic notes (Polymer Banknotes), why they were needed in India and why giving up paper notes is not so easy.
Two billion RBI plastic notes of ₹10 and ₹20
The decision comes weeks after the Indian Reserve Bank Note Printing Private Limited (BRBNMPL) – a subsidiary of the RBI – issued a tender. This tender indicated that the central bank RBI is preparing to move ahead with the new trial of polymer notes. A similar proposal was announced about 14 years ago, but it was never implemented.
Responding to a question in the Lok Sabha on Monday, Minister of State for Finance Pankaj Chaudhary said that on the recommendation of its Central Board, the RBI had proposed to bring one billion RBI polymer notes of ₹10 and ₹20 each for field trials. If the trials are successful, they will be released regularly. He said that the government has approved this proposal.
According to the minister, RBI has told the government that international studies show that the lifespan of RBI polymer notes is much longer than traditional paper notes, making them much more durable.
Will Indian plastic notes impact digital payments?
On the question whether RBI plastic notes can impact digital payments, Chaudhary said that the proposal is still in the initial phase and any impact can be assessed only after its regular issuance. He said that physical banknotes and digital payment systems complement each other and both will be available to the public.
The government also clarified that RBI polymer notes will remain in circulation along with the existing paper Indian currency. The government said there is no proposal to completely replace paper bank notes with polymer-based notes.
Why are RBI plastic notes on the agenda again?
This new initiative has started after the recent ‘Expression of Interest’ (EOI) issued by BRBNMPL. In July itself, BRBNMPL had invited competitive bids from manufacturers and suppliers of opacified polymer substrate with suitable security features for printing banknotes.
The RBI subsidiary said that the requirement mentioned in the EOI was only for immediate need. It also said that if the field trials of RBI’s polymer notes are successful, it intends to acquire larger quantities of polymer substrate of different denominations in future through RFP (request for proposal) or subsequent tenders.
What did the government say about plastic currency notes?
This new step is like reviving an idea announced in 2012. According to a Press Information Bureau (PIB) release dated December 13, 2012, the RBI, in collaboration with the Government of India, had considered several options, including printing banknotes on polymer substrate. At that time, it was decided to introduce one billion RBI polymer notes of Rs 10 on a field trial basis in five cities. It was also made clear in the PIB release that the main objective of introducing polymer or plastic notes was to increase the lifespan of bank notes and not to deal with the problem of fake notes.
Despite this, India, one of the world’s five largest economies, is still evaluating the RBI’s plastic notes, almost three decades after Australia introduced a full series of polymer banknotes. Today, about 60 countries use polymer currency in some form or the other.
What are polymer notes and how are they different from Indian currency?
RBI’s polymer notes are printed on non-fibrous and non-porous polymer substrate instead of conventional banknote paper. Existing Indian currency is printed entirely on paper made from long cotton fibers, which are obtained from cotton comber and linter. This means that there is no direct link between paper-based banknotes and the cutting of trees. The biggest reason for RBI to introduce polymer notes is their long life, especially for low value notes, which change hands frequently and get spoiled very quickly. Long life means less replacement, lower printing costs and less waste, and it can also help in preventing counterfeit notes.
Which countries use plastic notes?
Countries such as Australia, the United Kingdom and Canada are already using polymer banknotes made from durable plastic films. These notes last much longer than traditional paper banknotes and are more resistant to wear and tear, helping to reduce replacement costs over time.
Australia became the first country to issue polymer banknotes in 1988. Today, more than 60 countries use plastic currency. Among developed economies, the UK, Canada and New Zealand have adopted polymer notes. Closer to India, Thailand, Vietnam, Malaysia and Singapore also use plastic currency.
The Bank of Canada began moving to polymer banknotes in 2011 after studying the environmental impact of producing paper and plastic banknotes.
How can costs be reduced?
The biggest advantage of RBI’s polymer notes is their strength. Depending on the denomination of the note, polymer notes can last two to six times longer than paper notes. Lower value notes generally have a shorter lifespan because they are used more frequently.
Longer duration means that RBI will have to print fewer polymer notes in a given period. Although each polymer note costs more to produce than a paper note, fewer notes need to be made, transported, processed and ultimately destroyed. Over time, this reduces the overall cost of currency management and also reduces the environmental impact.
Due to less printing requirement, RBI’s own expenditure on printing currency has come down by about 24 per cent to Rs 4,875 crore in FY2026. Besides, the demand for Indian currency also remains strong. According to the annual report of RBI, the value of currency in circulation at the end of March 2026 increased by 12 percent on an annual basis to Rs 41.23 lakh crore. Rs 500 notes continue to dominate the circulation, accounting for 86 per cent of the total value of notes in circulation.
Studies by the Reserve Bank of Australia have shown that although polymer notes are more expensive to make because the polymer material costs more than paper, their longer shelf life reduces the cost of replacing and processing them, resulting in significant savings over time.
What does IMF have to say on this?
In a June 2016 article, the International Monetary Fund (IMF) said that countries concerned about the environmental impact of their currencies should consider adopting polymer notes.
According to the IMF, paper quickly became the preferred currency around the world and remained so for centuries. But with recent technological advances, plastic film notes offer more security features as well as longer shelf life and energy saving capabilities.
It said the life-cycle assessment examined every step involved in the production of both paper and polymer banknotes – from growing cotton for banknote paper or making raw materials for polymer notes, to the process of destroying and disposing of spent currency.
According to IMF, polymer proved to be better than paper in every category. It said polymer banknotes reduce the potential for global warming by 32 per cent and primary energy demand by 30 per cent compared to paper notes. It also found that polymer notes last more than twice as long as paper banknotes, while higher-value notes, which are used less frequently, last even longer.
The IMF further said that because fewer RBI polymer notes will need to be produced and distributed over the entire lifecycle of the currency series, the overall impact on the environment is lower. Polymer banknotes are also lighter than paper notes, making transport and distribution more efficient.
At the end of their lifespan, paper banknotes are usually shredded and sent to landfill. At the same time, polymer notes are cut into pieces and converted into pellets and recycled into everyday plastic products such as lawn furniture.
