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More time to change old notes

Mumbai, March 3: In a bid to avoid inconvenience to the general public, the RBI today extended the date for exchanging the pre-2005 bank notes to January 1 next year.

In January this year, the central bank had said it would completely withdraw from circulation all bank notes issued before 2005 after March 31.

It had said from April 1 the general public would be required to approach banks and exchange these notes. After July 1, to exchange more than 10 pieces of Rs 500 and Rs 1,000 notes, non-customers of banks will have to furnish proof of identity and residence to the bank branch where these notes were being exchanged.

According to the central bank, the main reason behind the move was that these notes had fewer security features compared with notes printed after 2005. While withdrawal of the old series notes is a standard international practice, the RBI has in the past withdrawn notes from the market in a routine manner through banks.

The RBI had subsequently watered down this requirement when it said that the public might initiate the process of exchanging notes at their convenience. Even after July 1, customers can exchange any number of these old series notes at the bank branches where they have accounts.

While reiterating that the number of these notes now in circulation is not significant, the RBI said the latest decision was taken to ensure that the public was not inconvenienced.

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 A majority of such notes have already been withdrawn through the banks and only a limited number of notes remain with the public,” the RBI added.

The apex bank further clarified that the public could continue to freely use these notes for any transaction and could unhesitatingly receive these notes in payment, as all such notes continued to remain legal tender.

 
 
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