Currency matters

All imperfect, mutilated & damaged notes are exchangeable at banks

Sajad Bazaz
Srinagar, Publish Date: Sep 21 2018 10:01PM | Updated Date: Sep 21 2018 10:01PM
Currency mattersRepresentational Pic

In a fast changing environment when money is changing hands digitally as financial transactions are being fast moved on to the electronic platform, paper currency still holds ground. When we talk of money, it’s the currency note of different denominations which instantly flashes in our mind. And honestly speaking, a currency note in pocket serves as a first-hand confidence booster to its holder.

However, one of the major issues with these currency notes faced by general public has always surfaced when the currency notes get damaged or soiled. Even as these damaged notes are changeable under the Reserve Bank of India’s (Note Refund) Rules, the banks’ conservative approach in exchanging these notes remained cause of worry for the general public. 

To mitigate the suffering of a common man, a termination phase of these notes was set in motion on January 1, 2014 by the Reserve Bank of India (RBI). All banks were directed not to re-issue a soiled, imperfect or mutilated note once it reaches into their custody. The menace of soiled notes got arrested to a large extent as the banks were forced to run special counters to exchange damaged notes.

Efforts to maintain clean currency received a sought of setback when demonetization drive in November 2016 phased out high value currency notes of Rs.500 and Rs.1000 denominations and two new denominations in Rs.200 and Rs.2000 were introduced. These new denomination currency notes  were not covered under the RBI (Note Refund Rule), 2009. Banks refused exchange of damaged Rs.200 and Rs.2000 denomination notes.

However, it took the apex bank almost two years to direct the banks to accept damaged new denomination currency notes for exchange. A few weeks back, amendments to Reserve Bank of India (Note Refund) Rules, 2009 were announced. Now As per the rule, people can exchange mutilated or defective notes at RBI offices and designated bank branches across the country for either full or half value, depending upon the condition of the currency. 

Notably, the RBI guidelines has mandated three broad categories of currency notes eligible either for exchange or refund. The first category is imperfect notes, including any bank note that has gone through the wash or exchanged so many hands that the print has become indecipherable.

Then there is mutilated note, which refers to currency note that has fallen apart or has been torn up. Even currency notes  that have been put together using torn pieces can be exchanged.

The third category is mismatched notes. In the unusual circumstance that you receive a note which is made up of two mismatched pieces stuck together, you can still get it exchanged.

The currency notes that are extremely brittle, badly burnt or stuck together in a way that they can’t be separated are not exchangeable. Bank can even refuse to exchange a note if it suspects that the note has been intentionally torn.

For all the damaged notes and accepted for exchange does not mean that one cannot get full value of the note. RBI Note Refund Rules envisage that in case of mutilated notes, you will get a full refund only if the area of the single largest undivided piece of the currency note is greater than 80% of the total area of an undamaged note. If the largest piece is larger than 40% of the area, but less than 80%, you will only receive half the value of the note. If the largest piece is smaller than 40% of the area, you won’t get a refund at all.

Meanwhile, one can deposit damaged notes to pay utility bills and taxes or deposit them in a savings bank account.

So, whenever a damaged currency note slips in your hands, you need not to palm it off to the next unsuspecting person you pay in cash, or let it languish in your wallet for months. You have a right to walk into any bank branch and get the damaged notes exchanged.

(The views are of the author & not the institution he works for)

Latest News

  1. An MLA was told to be part of govt or prepare for arrest by NIA: Omar Abdullah on horse-trading
  2. An MLA was told to be part of govt or prepare for arrest by NIA: Omar Abdullah on horse-trading
  1. Disgruntled Muzaffar Baig holds meeting with Mehbooba Mufti
  2. Disgruntled Muzaffar Baig holds meeting with Mehbooba Mufti
  1. Vijay Mallya must be extradited: London court
  2. Vijay Mallya must be extradited: London court
  1. BJP built tallest statue of Patel, but could not construct Ram temple: Omar Abdullah
  2. BJP built tallest statue of Patel, but could not construct Ram temple: Omar Abdullah
  1. RBI Governor Urjit Patel quits
  2. RBI Governor Urjit Patel quits
  1. Former MLA Tangmarg Abbas Wani resigns from PDP
  2. Former MLA Tangmarg Abbas Wani resigns from PDP
  1. Renowned historian and former Jamia Millia VC Mushirul Hasan passes away
  2. Renowned historian and former Jamia Millia VC Mushirul Hasan passes away
  1. JRL writes to UN chief, urges him to establish commission of inquiry into Kashmir rights abuses
  2. JRL writes to UN chief, urges him to establish commission of inquiry into Kashmir rights abuses
  1. Human Rights Day: Mirwaiz seeks help of world community to end Kashmir rights violations
  2. Human Rights Day: Mirwaiz seeks help of world community to end Kashmir rights violations
  1. On Human Rights Day, relatives of disappeared persons protest in Srinagar
  2. On Human Rights Day, relatives of disappeared persons protest in Srinagar
  1. India test fires Agni-V missile
  2. India test fires Agni-V missile
  1. Kushwaha quits NDA, resigns as Minister
  2. Kushwaha quits NDA, resigns as Minister
  1. Woman dies after falling from Ferris wheel at UP fair while clicking selfie
  2. Woman dies after falling from Ferris wheel at UP fair while clicking selfie
  1. Two drug peddlers arrested in Jammu and Kashmir's Rajouri
  2. Two drug peddlers arrested in Jammu and Kashmir's Rajouri
  1. Modi govt considers farmers as liability: Rahul Gandhi
  2. Modi govt considers farmers as liability: Rahul Gandhi
  1. JRL calls shutdown in poll-bound areas of Kashmir on Tuesday
  2. JRL calls shutdown in poll-bound areas of Kashmir on Tuesday
  1. BJP expels dissident leader after SC junks his plea against governor’s decision to dissolve JK legislative assembly
  2. BJP expels dissident leader after SC junks his plea against governor’s decision to dissolve JK legislative assembly
  1. Indian diplomat walks out of SAARC meeting in Pakistan over PaK minister's presence
  2. Indian diplomat walks out of SAARC meeting in Pakistan over PaK minister's presence
  1. UP woman locked inside home by son, dies of hunger: police
  2. UP woman locked inside home by son, dies of hunger: police
  1. Clashes erupt in Hajin after burial of slain teenage militants
  2. Clashes erupt in Hajin after burial of slain teenage militants
  1. Thousands attend funeral of slain teenage militants in north Kashmir’s Hajin
  2. Thousands attend funeral of slain teenage militants in north Kashmir’s Hajin
  1. SC dismisses former BJP legislator's plea challenging dissolution of Jammu and Kashmir Assembly
  2. SC dismisses former BJP legislator's plea challenging dissolution of Jammu and Kashmir Assembly
  1. India beat Australia by 31 runs in Adelaide Test
  2. India beat Australia by 31 runs in Adelaide Test
  1. Brexit deal: Theresa May faces fight for her political life on Tuesday
  2. Brexit deal: Theresa May faces fight for her political life on Tuesday
  1. Role of military limited, solution of Kashmir issue only through politics: Army commander
  2. Role of military limited, solution of Kashmir issue only through politics: Army commander
  1. Kashmir shuts on JRL call against human rights violations
  2. Kashmir shuts on JRL call against human rights violations
  1. Pakistan continues to harbour militants that turn around and kill American soldiers: Nikki Haley
  2. Pakistan continues to harbour militants that turn around and kill American soldiers: Nikki Haley
  1. 'I can't breathe', Jamal Khashoggi's last words at Saudi consulate
  2. 'I can't breathe', Jamal Khashoggi's last words at Saudi consulate
  1. Mughal road, Srinagar-Leh highway closed after fresh snowfall in Kashmir
  2. Mughal road, Srinagar-Leh highway closed after fresh snowfall in Kashmir
x
This site uses cookies to deliver our services and to show you relevant news and ads. By using our site, you acknowledge that you have read and understand our Cookie Policy, Privacy Policy, and our Terms of Service.That's Fine