Banks are gearing up to meet the expected customer rush for exchanging currencies after the Reserve Bank’s decision to phase out notes issued prior to 2005.
“There will be some pressure, but we are confident that we will handle it. We have cash depositing machines in large numbers, which will help ease the pressure. By the end of February, we will have around 1,000 cash depositing machines,” State Bank of India Deputy Managing Director P. K. Malhotra told PTI.
This is a good initiative as it will help remove the fake currency in circulation, he said, adding that notes printed after 2005 have more security features.
According to Oriental Bank of Commerce CMD S. L. Bansal, the bank would adhere to the directions of the RBI regarding withdrawal of notes.
“I don’t feel there would be a great rush for exchange of notes because most of such currency would be out of the system,” he said, adding that generally notes have a shelf life of 10 years only.
A senior official of Punjab National Bank said their branches were fully geared to meet the rush for currency exchange.
The Reserve Bank on January 22 decided to withdraw all currency notes issued prior to 2005, including Rs 500 and Rs 1,000 denominations, after March 31 in a move apparently aimed at curbing black money and fake currencies.
The public are required to approach banks for exchanging these notes.
The RBI also said the volume of such notes being withdrawn from circulation was not significant.
The removal of older currency notes from circulation is a standard international practice, RBI had said.
From July 1, 2014, persons seeking exchange of more than 10 pieces of Rs 500 and Rs 1,000 notes will have to furnish proof of identity and residence to the bank.
The notes printed prior to 2005 will continue to be legal tender even after July 1. Any number of these old series notes can be exchanged by people at bank branches where they have accounts, RBI had said.
According to RBI data, 7,351 crore pieces of currency notes were in circulation on March 31, 2013. Of this, 14.6 per cent were Rs 500 notes and 5.9 per cent were Rs 1,000 notes.