The Reserve Bank of India (RBI) is considering a pilot project to introduce polymer banknotes, reviving a program that was postponed more than a decade ago due to technological problems. This was reported by the newspaper “Business Standard“, citing sources.
In 2012, the authorities of the South Asian republic decided to introduce 1 billion 10-rupee banknotes into circulation in 5 cities as a trial period, but later abandoned the idea. The current decision of the RBI, according to the publication, is mainly due to the longer life of such banknotes, as well as the growing demand for cash, despite the growth of digital payments.
The recycling rate of damaged banknotes remains very high. In the fiscal year 2025-26 (ended March 31), 23.8 billion damaged notes were written off, an increase of 12.3% compared to the previous year. Most of the damaged notes were in the 500 and 100 rupee denominations. At the same time, the amount of cash in circulation continues to grow rapidly. The amount of cash in circulation increased by 11.5% year-on-year to a record 42.86 trillion rupees as of May 15.
According to sources, there has been a strong demand for low-denomination notes - 10 and 20 rupees - in recent years. However, the share of these notes in total circulation remains low. In value terms, the share of 10 rupee notes has remained at 0.7% over the past two years, while 20 rupee notes are only 0.8%.
The Reserve Bank of India's targeted efforts to encourage the use of coins have not yielded the desired results. The total supply of metallic currency has increased from approximately 1.2 billion in the fiscal year 2024-2025 to 1.5 billion in 2027. Of these, 800 million are 5 rupee coins and 400 million are 20 rupee coins.
Polymer banknotes have been introduced in nearly 60 countries. Australia was the first to introduce them, issuing the 10 dollar note in 1988 to protect against counterfeiting. Russia has issued only one official polymer banknote - a commemorative 100-ruble note for the 2018 FIFA World Cup. In total, 20 million polymer banknotes have been issued.