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The Reserve Bank of India (RBI) recently said it would completely withdraw from circulation all currency notes issued before 2005. The central bank has asked the public to exchange pre-2005 notes at bank branches starting from April 1, 2014. RBI said it wants to withdraw old currency notes and replace them with newer ones, which have enhanced security features. These features make it easier to differentiate between real and fake currency.
Till July 1, 2014 you can exchange old notes without any conditions. Thereafter, if you want to exchange old notes in large numbers, you will have to furnish your proof of identity and residence. However, before you panic and rush to the bank, let us see what exactly the central bank's advisory means.
1 Which notes will be withdrawn?
Notes issued before 2005 will be withdrawn. It is estimated that a lot of fake currency notes entered the system before 2005. Since then, RBI started introducing features which make it tougher to counterfeit currency notes.
2 How can these notes be identified?
Check the reverse side of the note. Those issued before 2005 do not have the year of printing on them.
3 Will all bank branches exchange these notes?
From April 1, 2014 till June 30, 2014, you can exchange these notes in any bank branch and you can exchange any number of notes.
4 What will change after July 1?
From July 1, to exchange more than 10 pieces of Rs 500 and Rs 1,000 notes, non-customers will have to furnish proof of identity and residence to the bank branch where they exchange the note.
This mean, if you go to a branch of a bank where you don't have an account, you will have to show documents such as drivers' licence, Aadhaar card, passport, PAN card etc. However, if you want to exchange notes of lesser than Rs 500 denomination or lesser than 10 pieces of notes of Rs 500 or Rs 1,000, there is no need to show any proof.
On the other hand, if you are a customer of a particular bank and you go to the branch of that bank, then you can exchange any number of notes, without giving any proof of identity.
5 Will banks charge any extra fee for exchanging notes?
No. Banks won't charge any fee.
6 Will I get the full value of my notes when I exchange?
Yes. Banks will give you the full value of the notes you exchange.
7 What should I do if I get an old note from the ATM?
Chances of this happening are less because RBI has been regularly replacing older notes with newer ones. So, a lot of notes issued prior to 2005 have already been replaced. However, if you do get pre-2005 notes from the ATM, you must exchange the notes at a bank.
