In News:

The Government has approved the RBI’s proposal under Section 25 of the RBI Act, 1934 to introduce one billion ?10 notes and one billion ?20 notes made of polymer for field trials.

Key Features

• Denominations: ?10 and ?20
• Quantity:1 billion pieces of each denomination
• Legal status: Polymer notes will be introduced alongside existing paper banknotes, not immediately replace them.
• Purpose of trials: To assess their:
  • Durability and cost-effectiveness
  • Security features
  • Environmental impact
  • Suitability for India’s climatic conditions
• Successful trials could pave the way for regular issuance.

What are Polymer Banknotes?

• Made primarily from biaxially oriented polypropylene (BOPP) rather than the cotton-pulp paper used for conventional Indian currency.
• Generallymore durable, water-resistant and tear-resistant than paper notes.
• Can incorporate transparent windows and embedded security features, making counterfeiting more difficult.
• They can reportedly last 2.5–4 times longer than conventional paper notes.

Why are They Being Considered?

• India spends nearly ?5,000 crore annually on replenishing and maintaining its banknote stock.
• Around 20–24 billion soiled banknotes are reportedly destroyed annually under the RBI’s Clean Note Policy.
• Lower-denomination notes such as ?10 and ?20 experience heavy circulation and therefore deteriorate faster.
• Longer-lasting polymer notes could potentially reduce replacement frequency, waste and lifecycle costs.