RBI targets rollout of polymer currency notes by FY28: Governor Malhotra

RBI Governor Sanjay Malhotra said India may introduce polymer currency notes by FY28 after ongoing field trials assess durability and suitability. The pilot involves Rs 10 and Rs 20 denominations, with polymer notes expected to complement existing paper currency rather than replace it

Mumbai: Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said the central bank is targeting the introduction of polymer currency notes by FY28 with field trials currently underway to assess their performance before a broader rollout.

At the post-Monetary Policy Committee (MPC) outcome media briefing, Malhotra said the pilot programme for polymer banknotes is still in progress. “There is still a pilot going on for polymer notes,” the RBI Governor said. “We will test the currency before bringing it to the market,” he said.

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The RBI Governor also indicated that the central bank will evaluate the results of the field trials before taking a final decision on wider circulation. Malhotra further said the RBI is targeting the circulation of polymer notes by FY28.

The remarks come days after the Finance Ministry informed Parliament that the government has approved the RBI’s proposal to conduct field trials of polymer currency notes in the Rs 10 and Rs 20 denominations.

According to the government, the central bank plans to issue one billion pieces each of Rs 10 and Rs 20 polymer notes as part of the pilot programme to assess their durability and suitability under Indian conditions.

The RBI has maintained that polymer banknotes are more durable than conventional paper notes and could help reduce replacement costs, particularly for lower denominations that witness high circulation and wear and tear.

Polymer notes also allow the incorporation of advanced security features, including transparent windows and enhanced anti-counterfeiting elements. The government has clarified that there is currently no proposal to replace paper currency entirely. Polymer notes, if introduced, would circulate alongside existing paper banknotes.

The RBI has also stated that any decision on wider adoption would depend on the outcome of the field trials and operational assessment of the notes under varied climatic and usage conditions across the country.