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The government has approved the RBI's proposal to conduct field trials of polymer (plastic) banknotes in the Rs 10 and Rs 20 denominations.
The pilot involves about one billion notes each of Rs 10 and Rs 20.
The approval follows recommendations of the RBI's Central Board under Section 25 of the RBI Act, 1934.
Polymer notes are more resistant to moisture, dirt and wear, so they last longer.
There is no proposal to replace existing paper currency; polymer notes will circulate alongside it.
Polymer banknotes are printed on a thin, flexible plastic film instead of cotton-based paper. Because plastic resists water, dirt and tearing, the notes last far longer in circulation, which lowers the cost of replacing worn currency, and they can carry security features that are harder to counterfeit. Australia became the first country to fully switch to polymer notes; many others use them for selected denominations. A 'field trial' means testing how the notes perform in real use before any decision on wider issue.
Simple Analogy: It is like swapping a paper document for a laminated one — it survives spills and handling much better.
India's central bank and the sole authority for issuing banknotes (except the Rs 1 note and coins, issued by the government)
Banking Awareness > RBI and Currency
General Awareness > Economy and Current Affairs
GS Paper 3 > Indian Economy > Money and Banking
Which one of the following statements correctly describes the meaning of legal tender money?
Answer: The money which a creditor is under compulsion to accept in settlement of his claims
A banknote printed on plastic film, more durable and harder to counterfeit than paper.
The provision governing the design, form and material of banknotes.