RBI plans to introduce polymer banknotes from FY28, says Malhotra

The Reserve Bank of India has begun the tendering process for polymer substrates and aims to introduce polymer banknotes from FY28, subject to successful field trials and operational assessment.

The Reserve Bank of India (RBI) is targeting the introduction of polymer banknotes from the beginning of the next financial year (FY28), subject to successful field trials and operational assessments, Governor Sanjay Malhotra said on Wednesday at the post-monetary policy press conference.

 

The central bank has initiated the tendering process to procure polymer substrate and will test the notes under Indian climatic and usage conditions before deciding on a wider rollout.

 

“We are still at a pilot stage. We will test and check how they perform in Indian conditions, climate, and other infrastructure we have put in place. It is only thereafter that we will see if we need to further scale it up as it is or with changes,” Malhotra said. “We are targeting that they are in circulation, if everything goes as planned, in the beginning of the next financial year,” he added.

 

Malhotra said the move has two key objectives. First, polymer notes have a much longer lifespan than paper currency, making them suitable for lower-denomination notes that see high circulation and wear and tear. Polymer notes have been used in several countries for more than 30 years and typically last three to four times longer than paper notes, he said.

 

Second, polymer notes will expand the RBI’s currency printing capacity as the economy’s cash requirements grow. 

 

The RBI has floated a tender to procure the polymer substrate on which the notes will be printed. The notes will undergo multiple stages of testing, including security clearance, before being introduced. They allow the incorporation of advanced security features, including transparent windows and enhanced anti-counterfeiting elements. Details of the security features will be disclosed at an appropriate time, Malhotra said.

 

Last month, the government approved the RBI’s proposal to introduce polymer banknotes in the ₹10 and ₹20 denominations. In a written reply in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said the RBI had sent a proposal to the government to introduce one billion ₹10 notes and one billion ₹20 notes for field trials. Regular issuance in these denominations will begin after the successful completion of the trials, he had said.

 

Chaudhary had also clarified that polymer banknotes would be issued alongside paper-substrate notes and that there was no proposal to replace paper currency entirely.

 

According to the RBI’s FY26 annual report, expenditure on security printing declined to ₹4,875.2 crore in 2025-26 (FY26) from ₹6,372.8 crore a year earlier. Around 60 countries, including Australia, the United Kingdom and Vietnam, have fully or partially adopted polymer banknotes. 

At pilot stage now

• Polymer notes to be tested under Indian climatic and usage conditions before wider rollout
• Longer lifespan makes polymer notes ideal for high-circulation, lower-denomination currency
• Polymer notes last three to four times longer than paper notes and are used in 60 countries
• It will boost RBI’s currency printing capacity as cash demand rises
• Government last month approved field trials of one billion each of ₹10 and ₹20 polymer banknotes