New Delhi, August 11: The government has approved the Reserve Bank of India’s (RBI) proposal to introduce two billion polymer banknotes — one billion each in Rs 10 and Rs 20 denominations — for field trials, Parliament was informed on Tuesday.

In a written reply to the Rajya Sabha, Finance Minister Nirmala Sitharaman said the proposal was submitted by the RBI to the government based on the recommendation of its central board under Section 25 of the RBI Act, 1934.

The proposal also provides for the regular issuance of polymer banknotes in the two denominations if the field trials prove successful.

“The proposal has been approved by the government. As per the RBI, these polymer banknotes are proposed to be issued along with paper substrate-based banknotes,” Sitharaman said.

The minister added that the RBI has informed the government that the procurement process is currently at an initial stage. Therefore, the exact timeline for introducing the polymer notes and the expenditure involved have not yet been determined.

Earlier this month, RBI Governor Sanjay Malhotra said the central bank was targeting the introduction of polymer currency notes at the beginning of the next financial year.

Speaking at a post-Monetary Policy Committee (MPC) media briefing, Malhotra said the pilot programme for polymer banknotes was still underway.

“There is still a pilot going on for polymer notes,” the RBI Governor said, adding that the currency would be thoroughly tested before being introduced into circulation.

The RBI Governor also indicated that the central bank would assess the outcome of the field trials before taking a final decision on wider circulation.

The RBI is targeting the circulation of polymer banknotes by financial year 2027-28 (FY28).