Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said the central bank is targeting the circulation of polymer currency notes by the beginning of the next financial year.
“The polymer currency notes have enhanced durability and life. The polymer currency is relevant for high-velocity lower-denomination notes. These notes have been in circulation for more than 30 years in various countries,” said Malhotra while addressing the press at the post-Monetary Policy Committee (MPC) outcome media briefing.
“It will also expand our capacity as the needs of the economy increase. We will test and check how it performs in the Indian climate and conditions and then see whether we need to scale it as such or with changes,” he said.
The remarks come days after the Finance Ministry informed Parliament that the government has approved the RBI’s proposal to conduct field trials of polymer currency notes in the Rs 10 and Rs 20 denominations. According to the government, the central bank plans to issue one billion pieces each of Rs 10 and Rs 20 polymer notes as part of the pilot programme to assess their durability and suitability under Indian conditions.
The RBI has maintained that polymer banknotes are more durable than conventional paper notes and could help reduce replacement costs, particularly for lower denominations that witness high circulation and wear and tear.
Polymer notes also allow the incorporation of advanced security features, including transparent windows and enhanced anti-counterfeiting elements.
The government has clarified that there is currently no proposal to replace paper currency entirely. Polymer notes, if introduced, would circulate alongside existing paper banknotes.
The RBI has also stated that any decision on wider adoption would depend on the outcome of the field trials and operational assessment of the notes under varied climatic and usage conditions across the country.
-IANS
