The Reserve Bank of India (RBI) is planning to retain the existing dimensions of ₹10 and ₹20 banknotes for its proposed polymer currency pilot, aiming to avoid expensive modifications to India’s automated teller machine (ATM) network. The decision would allow banks to use existing ATM cash-dispensing systems without immediately changing the cassettes, sensors and other components that handle different currency denominations.
According to sources cited by Moneycontrol, the polymer note pilot could begin on April 1, 2027. The RBI’s move addresses concerns raised by banks about the upfront costs of adapting ATMs to handle a different banknote format. The initial programme is expected to focus on ₹10 and ₹20 denominations, with polymer notes being tested under Indian climatic and operating conditions before any wider rollout.
Key Takeaways
- RBI plans to retain the existing dimensions of ₹10 and ₹20 notes for its polymer currency pilot.
- Keeping the dimensions unchanged could help banks avoid immediate ATM reconfiguration expenses.
- The pilot rollout is reportedly targeted for April 1, 2027.
- Previous ATM recalibration exercises reportedly cost the industry around ₹100 crore.
- The polymer substrate tender has attracted six bids, according to sources.
- The government has approved field trials of one billion polymer notes each in ₹10 and ₹20 denominations.
- Polymer notes are expected to last longer than conventional paper-based currency.
Why RBI Is Retaining the Existing Dimensions of Polymer Notes
The RBI’s decision to maintain the dimensions of existing ₹10 and ₹20 notes is primarily aimed at reducing the operational burden on banks.
ATMs use denomination-specific cash cassettes to store banknotes before dispensing them to customers. These systems are designed around particular note dimensions and physical characteristics. A change in the size of currency notes can require modifications to the machines.
If polymer notes were introduced in different dimensions, banks could face expenses related to replacing or modifying ATM cassettes, updating sensors and recalibrating machines.
By keeping the dimensions unchanged, the RBI could make it easier for banks to handle the new notes using their existing infrastructure.
The approach is particularly relevant because the initial polymer currency programme is a pilot rather than a nationwide replacement of existing paper notes.
ATM Reconfiguration Could Have Cost Banks Crores
The cost of modifying ATM infrastructure has been one of the concerns surrounding the proposed introduction of polymer currency.
According to estimates cited by sources in the Moneycontrol report, previous nationwide recalibration exercises following changes to ₹100 and ₹200 banknotes cost the ATM industry approximately ₹100 crore to reconfigure around 2.4 lakh machines.
The report also cited an example involving a bank with 8,500 ATMs. At an estimated reconfiguration cost of ₹2.5 lakh per machine, retaining existing note dimensions could help the bank avoid an upfront expense of approximately ₹21.25 crore.
| ATM infrastructure estimate | Reported figure |
|---|---|
| ATMs covered in previous recalibration exercise | 2.4 lakh |
| Estimated previous industry-wide cost | ₹100 crore |
| Illustrative ATM network of a bank | 8,500 ATMs |
| Assumed cost per ATM | ₹2.5 lakh |
| Potential avoided expenditure for that bank | ₹21.25 crore |
These figures are estimates cited by sources, not confirmed expenditure figures for every bank. Actual costs would depend on the ATM network, equipment configuration and modifications required.
The decision to retain note dimensions could therefore reduce the need for immediate investment in ATM hardware as the polymer currency pilot begins.
RBI Polymer Note Pilot Could Begin in April 2027
The RBI has been preparing to introduce polymer banknotes in India after evaluating their potential benefits and operational challenges.
In August 2026, RBI Governor Sanjay Malhotra said the central bank was targeting the beginning of FY28 for the introduction of polymer notes, subject to successful field trials and operational assessments.
The proposed pilot covers two denominations:
| Denomination | Approved field-trial quantity |
|---|---|
| ₹10 polymer notes | 100 crore pieces |
| ₹20 polymer notes | 100 crore pieces |
| Total | 200 crore pieces |
The government approved the proposal for field trials and possible regular issuance after successful testing.
The proposed April 1, 2027 start date reported by Moneycontrol is consistent with the RBI’s broader FY28 rollout target. However, the programme remains subject to the central bank’s testing and implementation requirements.
The RBI has also clarified that polymer notes would initially circulate alongside existing paper-based currency. There is no proposal to replace all paper banknotes with polymer notes.
Six Bids Received for Polymer Banknote Substrate
The procurement process for the material required to manufacture polymer notes is also progressing.
Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a wholly owned subsidiary of the RBI, has reportedly received six bids for the polymer substrate tender.
The tender seeks 68,000 reams of biaxially oriented polypropylene (BOPP) substrate, divided equally between the ₹10 and ₹20 denominations.
The material must meet technical requirements, including:
- A uniform coating of opacifying ink in the required colour.
- An anti-static coating to support printing and ink adhesion.
- Compliance with prescribed security and manufacturing specifications.
- No animal tallow or DNA derived from it in the substrate.
Indian polymer science company Uflex, in partnership with US-based Spectra Systems, is among the bidders, according to the report.
The tender is an important step because the quality and consistency of the substrate will influence the durability, printing performance and security characteristics of the new banknotes.
Why Is the RBI Considering Polymer Banknotes?
Traditional Indian banknotes are printed on paper made using cotton. Although these notes have established security and manufacturing systems, lower-denomination notes can experience substantial wear because they are used frequently.
Polymer banknotes are made using a durable plastic-based substrate. They can offer a longer circulation life and allow additional security features to be incorporated.
According to RBI Governor Sanjay Malhotra, polymer notes can last approximately three to four times longer than conventional paper notes.
The RBI is evaluating the material for two major reasons.
Longer currency life: Lower-denomination notes such as ₹10 and ₹20 are frequently handled during everyday transactions. A longer-lasting material could reduce the frequency with which worn-out notes need to be replaced.
Additional security features: Polymer substrates can support features such as transparent windows and other advanced anti-counterfeiting elements.
The RBI will assess how the notes perform under India’s climate, humidity, handling patterns and existing currency infrastructure before deciding whether to expand their use.
Countries Already Using Polymer Banknotes
India is not the first country to consider or adopt polymer currency. Several economies have introduced polymer notes, either across their entire currency system or for selected denominations.
| Country | Polymer currency adoption |
|---|---|
| Australia | Became the first country to introduce polymer banknotes in 1988 |
| United Kingdom | Uses polymer banknotes across its currency denominations |
| Canada | Uses polymer-based banknotes |
| New Zealand | Has adopted polymer currency |
| Singapore | Has issued polymer banknotes |
These international examples provide experience that can help inform India’s testing programme. However, the RBI will need to evaluate the material under domestic conditions before making a decision on wider issuance.
What the Decision Means for Banks and ATM Operators
Retaining existing dimensions could make the transition to polymer notes easier for banks and ATM operators.
Banks would not immediately need to undertake a large-scale exercise to modify cash-dispensing systems solely because of changes in banknote dimensions. This could reduce upfront expenditure and allow the RBI to conduct its pilot without creating a parallel ATM infrastructure upgrade programme.
The decision may also give banks more time to assess the operational requirements of polymer currency.
However, keeping dimensions unchanged does not automatically guarantee that every existing ATM will handle the new notes without adjustments. Polymer notes have different physical characteristics from cotton-based notes, and compatibility will still need to be tested across ATM models and cash-handling equipment.
The RBI’s field trials will therefore be important in determining how the new currency performs in the wider banking system.
The Bigger Picture
The RBI’s polymer currency initiative is not simply a change in the material used to print banknotes. It also involves manufacturing capacity, currency security, ATM compatibility and the operating costs of banks.
Retaining the existing dimensions of ₹10 and ₹20 notes could help address one of the biggest implementation concerns: the expense of modifying ATM infrastructure. At the same time, polymer notes could offer longer durability and additional security features.
The programme remains a pilot, and its success will depend on the performance of the notes under Indian conditions. The RBI will have to balance the potential long-term savings from more durable currency against the costs of manufacturing, procurement and operational changes.
Looking Ahead
The next major steps include finalising the polymer substrate procurement process, conducting field trials and preparing for the proposed FY28 introduction. The reported April 1, 2027 target will depend on the successful completion of the required technical and operational assessments.
For banks, the decision to retain existing note dimensions could reduce the immediate financial burden of the transition. For the RBI, the pilot will provide an opportunity to assess whether polymer currency can improve durability and security without requiring extensive changes to India’s existing cash-distribution infrastructure.
Frequently Asked Questions
1. Why is the RBI retaining existing dimensions for polymer notes?
The RBI plans to retain the existing dimensions of ₹10 and ₹20 notes to reduce the need for banks to modify ATM cassettes, sensors and cash-dispensing systems.
2. When will polymer notes be introduced in India?
The RBI is targeting the beginning of FY28, with the latest report indicating a possible pilot rollout from April 1, 2027. The timeline remains subject to testing and operational preparations.
3. Which denominations will initially use polymer currency?
The initial field trials will cover ₹10 and ₹20 banknotes, with one billion pieces planned for each denomination.
4. How much could banks save by retaining existing note dimensions?
The amount will vary by bank. Moneycontrol cited an illustrative example in which a bank with 8,500 ATMs could avoid approximately ₹21.25 crore in upfront reconfiguration costs, based on an assumed cost of ₹2.5 lakh per machine.
5. How long do polymer banknotes last?
According to RBI Governor Sanjay Malhotra, polymer banknotes can last approximately three to four times longer than conventional paper-based notes.
6. Will polymer notes replace paper currency in India?
No. The government has clarified that polymer notes are proposed to be issued alongside existing paper-based banknotes. There is currently no proposal to replace all paper currency.
Get the day’s top stories in your inbox
One concise email. No spam, unsubscribe anytime.
