India to issue new Rs10, Rs20 notes; will current banknotes remain legal?

India may soon see the introduction of new polymer banknotes for Rs10 and Rs20 denominations, according to Minister of State for Finance, Pankaj Chaudhary, response in the Lok Sabha (lower house).

The minister said that this followed a recommendation from the ministry's central board. The Reserve Bank of India (RBI) then sent a proposal to the Centre for field trials of the issuance of polymer banknotes in these denominations, and for regular issuance on the trial's success.

These banknotes will be issued along with the paper banknotes and there is "no proposal to replace paper currency with polymer substrate-based banknotes”.

This is the first time that these denominations are being mentioned as the ones being targeted in the trial.

According to Indian media reports, the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), a subsidiary of the RBI, had floated a global tender for 3.4 crore polymer sheets to print banknotes in two denominations.

The tender had said the amount was an “immediate requirement” and once field trials were successful, “we intend to go for procurement of larger quantity of substrate across different denominations”.

The last time a major change had taken place in terms of banknotes and currency, was when Rs500 and Rs1,000 notes were withdrawn from circulation in 2016.

Prime Minister Narendra Modi had announced that the notes would no longer be legal tender in a blitz against "black money", replacement Rs500 and Rs2,000 bills were then issued.

While the move was praised by business leaders and commentators, Indian stocks fell six percent in early trade, immediately after the announcement, before staging a slight recovery and were around three per cent lower at lunchtime than at the opening.

Meher Dhanjal is a Digital Journalist who breaks news first and breathes second. She loves chasing page views and finding stories that tug at readers’ heartstrings.