Government Approves RBI Plan to Test Polymer Rupee Notes

Finance Minister Nirmala Sitharaman informed the Rajya Sabha that the government has approved the Reserve Bank of India’s proposal to introduce polymer (plastic) rupee notes for field testing.

• Pilot Project:

  • RBI will print 100 crore polymer notes each of ₹10 and ₹20 denominations.

  • These notes will be tested in circulation alongside existing paper currency.

  • The move is based on recommendations from RBI’s Central Board under Section 25 of the RBI Act, 1934.

• Durability and Security:

  • Polymer notes are resistant to water, dirt, and oil, making them longer-lasting than paper notes.

  • They incorporate advanced security features, making counterfeiting significantly harder.

  • Countries such as Australia, Canada, and the UK already use polymer currency successfully.

• Procurement Process:

  • RBI has invited global companies to supply specialized polymer sheets for printing.

  • The deadline for applications is August 18.

  • Procurement of raw materials is in the initial stage, so no timeline has been set for public rollout.

• Inflation Context:

  • In response to another query, Sitharaman noted that retail inflation (CPI) fell from 5.4% in 2023–24 to 4.6% in 2024–25, and further to 2.1% in 2025–26.

  • However, due to West Asian crises, rising global energy prices, seasonal vegetable fluctuations, and El Niño effects, inflation rose to 3.9% in Q1 of 2026–27.

  • Despite this, inflation remains below RBI’s target ceiling of 4%.