In Jan 2014, RBI has issued a currency notification, according to which all those bank notes which were issued prior to 2005 are needed to be withdrawn. As such the regulator is intending to completely stop the circulation of such series of notes. The notification clearly mentions that all such pre 2005 notes will be acceptable for any monetary transactions only upto Mar 31st, 2014 and the withdrawal will commence from April 1st, 2014. As such, people may approach their banks and exchange such notes. This date for exchange of notes is now extended till Jan 1, 2015.
If you are retaining any cash amount including such pre 2005 notes, please note the following
- The notes issued prior to 2005 will not be acceptable for monetary transaction after March 31st, 2014. However, these notes will remain legal tender till the RBI or the government decides otherwise.
- The bearer of such notes may approach their banks and get them exchanged. Practically, for any customer 20-30 notes may be exchanged at a time over the bank cash counter.
- For non customer, who are exchanging 10 or more notes of Rs.500 or Rs.1000, banks may ask for identity and address proof.
- Though there is no limit on the exchange, however for exchange of Rs.50,000 or more, PAN will be required. The transactions above Rs. 10 lacs will be reported to Financial Intelligence Unit (FIU) under Prevention of Money Laundering Act, 2002.
The special care is been taken by RBI to cause least of inconvenience to the public and ensure smooth exchange.
How to identify?
A general tendency is to look at the condition of note, but my friend it is not true verification. In order to identify, the notes prior to 2005, you need to look at the back side, middle bottom of the note. The year of issue is printed. If it is not there, then you are carrying the note prior to 2005 only.
The basic aim of such phasing out of currency notes is to put a check on fake currency notes into Indian economy. Also the notes issued after 2005 has more security features and cannot be easily counterfeited. As such this phase out will flush out fake notes and reduce the risk of counterfeiting. Being a huge exercise, in which all the notes issued prior to 2005 is required to be exchanged, the dates were extended for the convenience of banks and general public.
