The Indian monetary system could see a major change. The Reserve Bank of India (RBI) is reportedly preparing to begin testing plastic, or polymer, notes in 10 and 20 rupee denominations from April 1, 2027. It is reported that 1 billion notes of both denominations will be printed under this project. Significantly, the size of these new notes will be the same as the current paper notes.

According to a Money control report, under this project, the RBI will issue 1 billion
polymer notes in 10 and 20 rupee denominations and test them. This will be a pilot project (field trial). Therefore, these notes will be issued in small quantities initially.

Because the size of the notes will remain unchanged, banks will benefit significantly. ATM machines will not need to be reconfigured to accommodate the new notes. This will help banks avoid additional costs.

What's the reason behind introducing plastic notes? 10 and 20 rupee notes are the most widely used in the market. These notes are used extensively for purchasing vegetables, paying bus and rickshaw fares, and in retail transactions. Due to constant use, paper notes quickly tear, deteriorate, or become unusable. This forces the RBI to print new notes frequently.

Polymer notes are also more durable. They are waterproof and dirt-resistant, allowing them to last three to four times longer than regular paper notes. This could help reduce the cost of printing notes in the future.

Will old notes be discontinued?
Due to the trial of new plastic notes, the existing paper notes of 10 and 20 rupees will not be discontinued. The old notes will continue to be used as legal tender. Polymer notes and paper notes will continue to circulate simultaneously.

PC: ABP NEWS