The Reserve Bank of India (RBI) has announced the decision to withdraw from circulation all currency notes printed prior to 2005. It is a standard international practice to withdraw old series of banknotes from time to time. The reason for withdrawal of banknotes printed prior to 2005 is to remove them from the market as they have fewer security features compared to banknotes printed after 2005. It is expected that this will prevent counterfeiting of banknotes. The RBI has already been withdrawing these notes from the market in a routine manner through banks. In RBI’s view, the volume of the banknotes printed prior to 2005 today, still in circulation, is not significant enough to impact general public in a large way.
The schedule of withdrawal announced by RBI is as under:
i) All older series of banknotes issued prior to 2005 would be acceptable for all kinds of monetary transactions only till March 31, 2014.
ii) Thereafter the public will be required to approach bank branches which would provide them exchange facilities on a ongoing basis.
iii) From July 1, 2014 onwards, members of public can exchange any number of these old series notes from the bank branches where they have their account. However, non-customers would have to furnish proof of their identity and residence to the Bank to exchange more than 10 pieces of Rs. 500.00 and Rs. 1000.00 notes.
iv) These notes will continue to be legal tender and, therefore, no end date has been specified for the exercise.
CAclubindia
