Mumbai/IBNS, July 17 -- The Reserve Bank of India (RBI) is preparing to introduce polymer banknotes in a pilot project, marking a major step towards overhauling the country's currency system, NDTV Profit reported.

Pilot to begin with lower denomination notes

As part of the initial phase, the RBI is expected to issue polymer versions of Rs. 10 and Rs. 20 banknotes to assess their durability and public acceptance before expanding the programme.

Paper and polymer notes to coexist

The introduction of polymer banknotes will not replace paper currency entirely.

Instead, both paper and polymer notes will remain in circulation simultaneously, with the new polymer currency being introduced gradually in phases while existing paper notes contin...