RBI eyes FY28 launch for polymer banknotes after field trials: Governor Malhotra

Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said the central bank is targeting the introduction of polymer currency notes in FY2027-28, subject to the successful completion of ongoing field trials. 

"We are targeting that they (polymer notes) are in circulation, if everything goes as per plan, in the beginning of the next financial year," Malhotra said while addressing the media after the RBI's monetary policy announcement. He said the central bank will evaluate the outcome of the field trials before taking a final decision on the wider circulation of polymer banknotes. 

The remarks come days after the Finance Ministry informed Parliament that the government had approved the RBI's proposal to conduct field trials of ₹10 and ₹20 polymer banknotes. 

As part of the pilot programme, the RBI plans to issue one billion pieces each of ₹10 and ₹20 polymer notes to assess their durability, performance, and suitability under Indian conditions. 

The central bank has said polymer banknotes are more durable than conventional paper currency and could help reduce replacement costs, particularly for lower-denomination notes that experience high circulation and frequent wear and tear. 

Polymer notes can also incorporate advanced security features, including transparent windows and enhanced anti-counterfeiting elements, making them more resistant to forgery. 

The government has clarified that there is no proposal to replace paper currency entirely. If introduced, polymer banknotes will circulate alongside existing paper notes. 

The RBI has maintained that any decision on wider adoption will depend on the results of the field trials and an operational assessment of the notes across diverse climatic and usage conditions in the country. 

The announcement came alongside the RBI's monetary policy decision, under which the Monetary Policy Committee (MPC) unanimously kept the benchmark repo rate unchanged at 5.25% while retaining its neutral policy stance. The Standing Deposit Facility (SDF) rate was left unchanged at 5.0%, while the Marginal Standing Facility (MSF) rate and the Bank Rate remained at 5.50%. 

The next bi-monthly MPC meeting is scheduled for October 5-7, 2026.