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Every Indian currency note prominently bears a promissary message from the Reserve Bank of India Governor, which states: “I promise to pay the bearer the sum of (the respective currency denomination value).”
The spirit of that promise extends to the exchange of soiled notes as well. The Reserve Bank of India Act, 1934 (2 of 1934) stipulates that the exchange of soiled notes is a “duty that the banking system as a whole owes to the public.”
But in what is being seen as a violation of that promissory clause, the RBI is not honouring its promise of the exchange of soiled notes of ₹2,000 and ₹500 denomination even 14 months after they were introduced in November 2016 in the wake of the demonetisation initiative.
The RBI has not framed the Note Refund Rules (NRR) for the new currency notes till date under the Reserve Bank of India (Note Refund) Rules, 2009, which were updated in July 2016, months prior to the demonetisation in November 2016.
Awaiting RBI moveOnly if the note-refund rules are framed will RBI offices and designated banks accept soiled notes for exchange and give a refund whose value may vary with the nature and extent of damage to the soiled note.
When contacted, a top executive of a public sector bank said banks are “helpless” till the RBI revises the rules and incorporates the new denominations in the mandatory measurement table to calculate the refund amount for soiled notes.
Informed sources attribute the delay in the framing of the new note-refund rules to the difference in the dimensions of the new notes and the withdrawn ones. The value of a mutilated bank note is ascertained by measuring the damaged part against a grid-based system.
The ₹2,000 and ₹500 notes are not being accepted for refund at the RBI counters, too. This has anguished the public.
The central bank recently issued new notes of ₹200, ₹50 and ₹10 denomination. Those notes too are not yet in the NRR system. It is learnt that the Ministry of Finance is in the process of framing of refund rules for the notes.
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