Polymer banknotes of Rs 10 and Rs 20 cleared for trials
Why in the news
Finance Minister Nirmala Sitharaman told Rajya Sabha in a written reply that polymer notes of two low denominations would be tried out.
Key facts
- One billion notes each of ₹10 and ₹20 approved for field trials.
- RBI’s Central Board recommended the plan, which went to the government under Section 25 of the RBI Act, 1934.
- Regular issuance of these two denominations would follow successful trials.
- Per RBI, polymer notes would circulate alongside paper notes, not replace them.
| Feature | Benefit |
|---|---|
| Lifespan | Typically two to five times that of cotton-based paper notes, so suited to the lowest denominations |
| Hygiene | Resists moisture, dirt and grease |
| Security | Allows transparent windows, optically variable devices, holograms |
| Cost | Costlier to print but cheaper over its longer circulation life |
| Environment | Recyclable, though production is petroleum-based |
Legal framework
- Section 25: Central Government approves design, form and material after considering the Central Board’s recommendations.
- Section 24 allows denominations from ₹2 up to ₹10,000 as specified by the Centre.
Exam angle
- Nodal bodies: RBI proposes, Central Government approves design and material.
- Section 22: sole right to issue notes with RBI. Section 25: design, form and material. Section 24: denominations.
- Related terms: polymer substrate, field trial, optically variable devices.