Reserve Bank of India (RBI) disposed of 17 billion soiled and mutilated banknotes in FY26. Its next experiment is making low-value cash last longer.
Put that beside its latest experiment, and the economics become interesting. The government has approved field trials for 1 billion ₹10 polymer notes and 1 billion ₹20 polymer notes.
Those denominations were not chosen randomly.
₹10 and ₹20 notes together make up almost one-fourth of all Indian banknotes by number, but only 1.3% of their total value. They carry very little monetary value individually, but they spend their lives changing hands.
Meanwhile, cash itself is hardly disappearing.
The value of banknotes in circulation grew 11.9% to ₹41.23 lakh crore by March 2026, and RBI spent ₹4,875.2 crore on security printing in FY26.
RBI withdrew about 17.0 billion soiled and mutilated notes in FY26. That was lower than the prior year, but not necessarily because fewer notes wore out: RBI said disposal was interrupted while it replaced shredding and briquetting systems.
India has tried this before.
A ₹10 polymer-note trial was planned more than a decade ago but was shelved after technical challenges.
Financial infrastructure usually changes slowly because paper durability means little until it survives millions of wallets, shops, ATMs, and cash counters.
I would watch one number from this experiment: Cost per usable year of a banknote.
If polymer wins there, ₹10 and ₹20 could be only the beginning.
