Even as the central government has approved the RBI’s proposal to introduce a billion pieces of Rs 10 and Rs 20 polymer banknotes, people are curious to know if the new notes are going to replace the paper
currency. However, the government has clarified that there is no proposal to replace paper currency with polymer banknotes in India, even as it has approved the introduction of polymer notes for select denominations on a trial basis.
“As per the RBI, polymer banknotes are proposed to be issued along with paper substrate-based banknotes and that there is no proposal to replace paper currency with polymer substrate-based banknotes,” said Minister of State for Finance Pankaj Chaudhary in a reply to a query in the Lok Sabha on July 27, 2026.
Unlike paper notes, polymer notes absorb less moisture and dirt, making them more resistant to grime, tears and accidental spills.
Government Approves Polymer Notes for Rs 10 and Rs 20
Minister of State for Finance Pankaj Chaudhary informed Parliament that the Reserve Bank of India (RBI), based on the recommendation of its Central Board, had submitted a proposal to introduce one billion polymer banknotes each in Rs 10 and Rs 20 denominations for field trials.
The proposal also envisages regular issuance of these notes after the successful completion of the trials, and the government has approved the proposal.
Why Is RBI Introducing Polymer Banknotes?
According to the RBI, international studies suggest that polymer banknotes have a significantly longer lifespan than conventional paper currency, making them more durable and potentially reducing replacement costs over time.
“RBI had informed that as per international studies, the life span of polymer banknotes is significantly higher than that of paper banknotes. The introduction of polymer banknotes is currently in a preliminary phase and the impact on digital payments, if any, could be ascertained only after regular issuance of these notes. Moreover, banknotes and digital payment systems are complementary payment tools available to public,” Chaudhary stated.
What Does This Mean for Cash Users?
For now, people will continue using existing paper currency as usual. If polymer notes are rolled out after successful field trials, they are expected to coexist with paper notes in circulation.
The government also clarified that banknotes and digital payment systems are complementary payment tools, indicating that the introduction of polymer currency is not aimed at reducing cash usage or replacing digital payment methods.
