The Reserve Bank of India has extended the date for exchanging banknotes issued prior to 2005 to January 1, 2015.

In late January, the central bank had advised that after March 31, 2014, it will completely withdraw from circulation all banknotes issued prior to 2005. Further, from April 1, 2014, the public will be required to approach banks for exchanging these notes.

Then it said, from July 1, 2014, to exchange more than 10 pieces of ₹500 and ₹1,000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes.

Subsequently, it clarified that from this date onwards, members of the public can exchange any number of these old series notes from the bank branches where they hold their accounts.

The public can easily identify the banknotes issued before 2005 as they do not have on them the year of printing on the reverse side.

They can exchange such notes at a bank branch convenient to them.

The RBI, in a statement issued on Monday, advised banks to facilitate the exchange of these notes for full value and without causing any inconvenience whatsoever to the public.

Security features

The RBI said the rationale behind its move to withdraw banknotes printed prior to 2005 is to remove them 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.

“This withdrawal exercise is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time.

“A majority of such notes have already been withdrawn through the banks and only a limited number of notes remain with the public,” the central bank statement said.

The Reserve Bank clarified that the public can continue to freely use these notes (printed before 2005) for any transaction and can unhesitatingly receive these notes in payment, as all such notes continue to remain legal tender.

(This article was published on March 3, 2014)
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