RBI to Pilot 200 Crore Polymer Banknotes of ₹10 and ₹20 from April 2027
The Reserve Bank of India (RBI) is preparing to launch a targeted pilot project to introduce 200 crore (2 billion) polymer currency notes across ₹10 and ₹20 denominations, scheduled for rollout from April 1, 2027. Under the central bank's plan, approved by the Union Government under Section 25 of the RBI Act, 1934, the pilot will introduce one billion notes each of ₹10 and ₹20 to evaluate their durability, counterfeiting resistance, and operational performance under Indian climatic conditions.
Importantly for the banking and cash-handling sector, the central bank plans to retain the exact dimensions of existing paper banknotes. This design decision ensures that commercial lenders and cash-logistics companies avoid substantial capital expenditure on reconfiguring automated teller machines (ATMs), cash deposit machines (CDMs), and dispensing cassettes.
Operational Cost Savings for Lenders
When new denominations like the ₹100 and ₹200 banknotes were previously rolled out with altered dimensions, the ATM industry had to spend an estimated ₹100 crore to recalibrate approximately 2.4 lakh machines nationwide. By matching the physical dimensions of the existing Mahatma Gandhi (New) Series notes, the central bank eliminates hardware and software disruption across bank branches and white-label ATM operators.
The polymer substrate procurement process is being executed by Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a wholly owned subsidiary of the RBI. The subsidiary floated a tender for 68,000 reams of biaxially oriented polypropylene (BOPP) substrate, evenly split between the two denominations. Six bids have reportedly been received, including from domestic packaging and polymer specialist Uflex in partnership with US-based Spectra Systems.
Durability and High-Velocity Circulation
RBI Governor Sanjay Malhotra highlighted that polymer banknotes can last between two to four times longer than traditional cotton-rag paper notes. The ₹10 and ₹20 denominations exhibit the highest transaction velocity in India’s everyday cash economy, frequently exposed to moisture, folding, and heavy handling at local markets and transit hubs.
Replacing soiled and mutilated notes forms a substantial portion of the RBI’s annual security printing expenditure. Over 60 jurisdictions, including Australia, the United Kingdom, Canada, and Singapore, have previously transitioned to polymer substrates to cut down replacement cycles and curb counterfeiting.
Key Clarifications on Legal Tender and Denominations
The central bank and the Ministry of Finance have issued critical clarifications regarding the rollout:
- Dual Circulation: Existing paper notes of ₹10 and ₹20 will not be withdrawn or demonetised; polymer notes will circulate concurrently as valid legal tender.
- No New Denominations: The government has reiterated that there are no proposals to introduce polymer variants for higher denominations such as ₹100 or ₹500, and rumors regarding a revival of the ₹1,000 note have been officially debunked.
- Conditional Expansion: Wider adoption or regular issuance will depend entirely on field trial assessments evaluating counting-machine compatibility, public reception, and heat tolerance across diverse geographic regions.
