Rs 500 notes can be freely swapped at banks, says RBI

As the common man went on speculating frantically on what to do with banknotes printed before 2005, Reserve Bank of India on Friday tried to calm the nerves by saying that public may initiate the process of exchanging notes at bank branches at their convenience.

RBI said its move to withdraw currency notes printed before 2005 is to check counterfeit notes and these notes will continue to be legal tender even after the July deadline. It said that after July 1, 2014, public can exchange any number of these old series notes from the bank branches where they have their accounts.

Non-customers of a bank will have to furnish proof of identity and residence to the bank branch in which they want to exchange more than 10 pieces of Rs 500 and Rs 1000 notes.

The RBI clarified that the rationale behind its move to withdraw banknotes printed prior to 2005 is to remove these banknotes from the market because they have fewer security features compared to banknotes printed after 2005. "It is standard international practice to withdraw old series notes," it said on Friday responding to queries raised by several quarters.

The RBI has already been withdrawing these bank notes from the market in a routine manner through banks. "The volume of the banknotes printed prior to 2005 today, still in circulation, is not significant enough to impact the general public in a large way," it said.

The RBI said it would monitor and review the process of withdrawal of old series notes so that the public is not inconvenienced in any manner.


Source: Economic Times