Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said the central bank is aiming to introduce polymer currency notes by the beginning of the 2027-28 financial year (FY28). Speaking at the post-Monetary Policy Committee (MPC) press conference, Malhotra said the RBI would first conduct extensive testing of the new banknotes under different conditions to assess their durability and performance before a wider rollout.

The Governor said polymer banknotes are expected to have a significantly longer lifespan than conventional paper currency, making them more durable and cost-effective over time. His remarks also confirmed an earlier report that the RBI was preparing to begin pilot testing of polymer notes. The initiative marks the next phase in the central bank's efforts to modernise India's currency system while enhancing its resilience against wear and counterfeiting.

According to official sources, the pilot rollout is expected to begin with lower-denomination banknotes, specifically Rs 10 and Rs 20 notes. Based on the results of the trial, the RBI is likely to move towards a phased nationwide rollout from 2027. Officials have clarified that polymer notes will not replace existing paper currency immediately. Instead, both polymer and paper banknotes will coexist in circulation, allowing for a gradual transition.

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The move gained momentum after the RBI's note-printing subsidiary issued a global Expression of Interest (EOI) inviting manufacturers to supply specialised polymer substrate sheets embedded with advanced security features. The tender seeks technology capable of improving the durability of banknotes while offering stronger protection against counterfeiting. The deadline for submitting bids under the global tender is August 18.

Polymer banknotes are already in use in several countries, including Australia, Canada, the United Kingdom and New Zealand. Compared with conventional paper notes, polymer currency is more resistant to moisture, dirt and physical damage, allowing it to remain in circulation for longer periods. If successfully implemented, the RBI's initiative is expected to improve the longevity of India's currency, reduce replacement costs and strengthen the security features of banknotes.

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