If you have an older bank note in India, it will only be a piece of paper soon!!

Author:

Kamal Yadav 

We all know that Indian currencies are issued by RBI (Reserve Bank of India) and it takes appropriate steps from time to time to manage country‘s economy. So one day I was thinking that RBI is not doing anything interesting these days (at least for people like me). But very next morning, I found it in action. Dramatically, RBI in its notification stated that bank notes issued before 2005 in India will be withdrawn by RBI and no longer, we will be able to use them legally. It has not specified the reason behind it but possibly it can be a step taken to unearth the black money.

People are required to exchange bank notes issued before 2005, on or after 1^st April 2014. RBI requests people not to get hyper but to support its measure.  All the Banks are asked to exchange notes of people without making any discrimination. You can exchange up to 10 notes but for exchanging more than 10 notes one has to show his/her valid ID PROOF.

How to identify my notes are not valid?

Market value of old notes will become zero after 1^st April 2014. Hence, to maintain its value you must get them exchanged from any nearest branch of their bank in India. Now the question arises, how you can identify these notes?  


You can easily identify old notes as they don’t have ‘year’ printing on their back side. Let’s have a look on the picture given below. 

This note doesn't  have 'year' printed on its back side. Therefore it needs to be exchanged from the bank. Here’s another image of bank note. This bank note has '2013' written on its back side, hence it will remain valid even after RBI's notification.

FAQs about notification issued by RBI on taking back older notes.

Q: Will my currency notes become invalid from April 1, 2014?

A: There is no need for panic as you will still be able to go to a bank and get them exchanged. But after April 1, you will not be able to use them for normal transactions.

Q: Is there any deadline to get my notes exchanged at the bank?
A: After July, 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.

Q: How to identify the notes which are meant for exchange?

A: All notes printed after 2005 have the year printed in the middle of the bottom row which also have increased security features. Pre-2005 notes do not have these features.

Q: Why year 2005 as been decided as the cutoff year?

A: Notes issued since 2005 have a different design and colour and this will bring uniformity to the cash system. They also have more security features to tell apart from fakes such as added watermark, etc. These notes are thus better in fighting the sham currency peril.

Q: Which denomination notes are under scanner?

A: All current denominations -- from Rs 5 to Rs 1,000 -- are under scanner for exchange issued before year 2005.

Q: What is the motive behind the RBI move?

A: While the RBI has not given any explanation for this step officially. But it could be understood as a measure to flush out black money that could still be held in cash.

Q: What will Central bank do with the Pre-2005 notes after taking it from us?

A: RBI will destroy withdrawn currency notes by mincing them.

Q: What are the legal provisions governing fake notes?

A: Printing and/ or circulation of forged Indian Currency Notes is described an offence under Sections 489A to 489E of the Indian Penal Code.

Q: How will the bank deal with the situation where I knowingly deposit a Pre-2005 note?

A: The bank will confiscate the note in your presence and issue you an acknowledgement which will be authenticated by the cashier as well. The bank will thereafter forward those notes to the local police authorities for necessary action.

Oh yes! this blog is over now, hope you won’t cry on 1^st April, 2014 and get your currency exchanged from the nearest bank.