Plastic Money, Literally: RBI to Field-Test Polymer ₹10 and ₹20 Notes
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Article summary
The government approved a Reserve Bank of India (RBI) proposal to conduct field trials of polymer banknotes, with about one billion notes each in the ₹10 and ₹20 denominations. Polymer, or plastic, banknotes are printed on a thin plastic film rather than cotton-based paper, and are used by several countries because they are more durable, harder to counterfeit and cleaner than paper notes, though costlier to produce. A field trial tests how the notes perform in real circulation — durability, machine handling, public acceptance — before any decision on wider adoption. The choice of the lowest-value ₹10 and ₹20 notes is deliberate: these are the most heavily circulated and fastest-wearing denominations, where the durability advantage of polymer would most reduce the cost and frequency of replacement. The move is a small but notable step in the management of India's physical currency, taken against the backdrop of a rapidly growing digital-payments economy in which the role of cash is evolving rather than disappearing.
What this tests
Sample questions — answers revealed after test
Q1. Under which law does the Reserve Bank of India derive its sole authority to issue banknotes?
Q2. The trial is being run on ₹10 and ₹20 notes rather than higher denominations. Which one of the following best explains that choice?
Q3. Consider the following statements about currency in India: 1. Polymer banknotes are printed on a plastic substrate and have been adopted fully by countries such as Australia. 2. The rise of digital payments has not eliminated the need to manage the physical cash system. 3. Because digital payments are growing rapidly, the demand for physical currency in India has already fallen to negligible levels. Which of the statements given above are correct?