India Clears Proposal for Polymer Currency Notes After Decade-Long Delay

The Reserve Bank of India (RBI) has finally cleared a proposal to field-test Rs 10 and Rs 20 polymer currency notes. The move marks a significant step in India's currency evolution, with around 60 countries already operating on polymer-based notes.

The RBI first proposed introducing plastic currency notes in 2009 as a pilot project, but it took nearly three years to get approved by the Centre in 2012. As part of the trial, 1 billion pieces of Rs 10 polymer notes were introduced in five locations across India with varying geographical microclimates.

However, the RBI found that test currency notes caused substantial friction and static electricity while moving through commercial high-speed machines, leading to high error rates for banks. An environmental audit was conducted, which concluded that plastic currency is beneficial for the planet in the long term due to its extended lifespan and reduced need for printing new notes.

The RBI's printing arm, Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), had abandoned experimental programs in 2016 after demonetisation. The Centre has now formally cleared the proposal, paving the way for a formal launch of polymer currency notes in India.