Date : 24 Jan 2014 – Banknotes issued prior to 2005 to be withdrawn – RBI Clarification

Further to our Press Release dated January 22, 2014 on the subject and in response to the queries raised, the Reserve Bank of India (RBI) clarifies that the rationale behind its move to withdraw banknotes printed prior to 2005 is to remove these banknotes from the market because they have fewer security features compared to banknotes printed after 2005. It is standard international practice to withdraw old series notes.

How to Recognise bank notes issued prior to 2005

The RBI has already been withdrawing these bank notes from the market in a routine manner through banks. In Reserve Bank’s view, the volume of the banknotes printed prior to 2005 today, still in circulation, is not significant enough to impact the general public in a large way.

However, it advises that the members of public may initiate the process of exchanging notes at bank branches at their convenience. Further, even July 1, 2014 onwards, members of public can exchange any number of these old series notes from the bank branches where they have their accounts.

The RBI assures that it will continue to monitor and review the process of withdrawal of old series notes so that the public is not inconvenienced in any manner.

Regardless of the above, the RBI reiterates that the notes printed prior to 2005 will continue to be legal tender.

Alpana Killawala
Principal Chief General Manager

Press Release: 2013-2014/1491

—————-

RBI/2013-14/509
DCM(Plg) No.G- 19/3880/10.27.00/2013-14

March 03, 2014

The Chairman / Managing Director/ Chief Executive Officer
All Scheduled Commercial Banks
Primary(Urban) Co-operative Banks/RRBs

Dear Sir /Madam

Withdrawal of all old series of Banknotes issued prior to 2005

Please refer to our circular DCM (Plg) No. G-17/3231/10.27.00/2013-14 dated January 23, 2014 on the captioned subject which was followed by a Press Release on January 24, 2014 (copy enclosed).

2. On a review of the matter, it has been decided to extend the date for exchanging the pre-2005 banknotes to January 01, 2015. These instructions have been included in a Press Release dated March 03, 2014 (copy enclosed).

3. You are advised to facilitate the exchange of such notes for full value without causing any inconvenience to the public, whatsoever. These notes will retain their legal tender status and the public can continue to use these for any transaction/ payment.

4. As advised, please issue suitable instructions to all your branches to provide exchange facilities to members of public and to stop re-issue of the pre- 2005 series banknotes. Please also ensure that such notes are not dispensed through the ATMs/ over your counters. The methodology to be followed for dealing with the Pre-2005 series banknotes contained in Para 3 of the circular dated January 23, 2014 referred to above remains unchanged.

5. A list of dos and don’ts, is being enclosed for your guidance.

6. Please acknowledge receipt.

Yours faithfully

(B.P Vijayendra)
Principal Chief General Manager

Encl: 3 sheets


DOs

  1. Banks should sensitize the members of public that the pre-2005 notes would continue to be legal tender. Banks should endeavour to organize note exchange melas in semi-urban/rural areas.
  2. All denominations of banknotes issued prior to 2005 series have to be exchanged.
  3. These notes must be freely accepted and exchanged by all bank branches from all members of public, whether customers or non-customers.
  4. The process of exchange at bank branches should be started forthwith and undertaken as per the convenience of members of public.
  5. The exchange of notes should be done free of cost.
  6. The value of such notes may be credited in customers’ account, if desired.
  7. The value of such notes payable shall be in terms of the RBI, Note Refund Rules, 2009.

DON’T

  1. Banks should not place any restriction on the number of banknotes to be exchanged by a member of the public.
  2. Banks should not issue pre-2005 series notes over the counter or through ATMs.
  3. Currency chest branches should not refuse pre -2005 banknotes from their linked branches.

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Category : Fema / RBI (3479)
Type : Notifications (15816) Notifications/Circulars (31864)
Tags : RBI Notifications (1969)

0 responses to “Pre-2005 banknotes – Dos and don’ts for Exchange, RBI extends date to 01.01.2015”

  1. Shankar says:

    After Mr. Rajan has taken over as Governor there are some moves taken by him which are appreciable. However, I fail to understand his logic of withdrawing all the notes issued prior to 2005. He should be aware that counterfeiters understand the cost factor that to print notes of smaller denominations is not “Profitable” for them. They will always print notes of denominations Rs. 100/- and above. Even if we buy the RBI argument that there are fewer or no security features in the notes issued prior to 2005, what difference does it make for notes of smaller denominations as long as they are genuine. The RBI’s move may be having a hidden agenda- to flush out “Black Money”. But then, this move also may not serve any purpose since the holders of “Black Money” will exchange the notes for new notes and continue to hold “Black Money”. This is similar to the decision of Govt. of Maharashtra to legalise the slums extending the year, now upto 2000, in spite of one Chief Minister giving an undertaking to the Court not to extend the date further. The RBI says that the old notes will continue to be a legal tender. If it is a legal tender, nobody can refuse to accept. I would request RBI to rethink on this and recall only notes of Rs. 100/- and above.

  2. Ashok Aggarwal says:

    The decision of RBI to extend time limit and issuance of instructions to banks on dos & don’ts is highly appreciable. Let us hope These Instructions are scrupulously followed by Banks and general public is not inconvenienced or harassed.

  3. Bansi Lal Bijlani says:

    Thanks for the article. It will hade to the comfort of public and avoid general queries etc. between one another. It will also avoid anxiety in their minds.

  4. Prasad says:

    Dear Editor,

    Please change the heading. Date should be 01.01.2015. Jan 01, 2014 already over.
    Change immediately so that readers should not confuse.

    Regards
    Prasad

  5. Rajan says:

    The typo error extended date is to be read as 2015 and not 2014.

  6. D B DESAI says:

    Please correct the date in the heading of the article to read as 01-01-2015.

  7. shailesh P. Dobariya says:

    There is a slight error in heading . RBI has extended date to 01.01.2015 not date to 01.01.2014

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