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

KOLKATA: As the gullible 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 1,000 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.

RBI has issued the advisory on withdrawal of banknotes on January 22. It said it hs already been withdrawing these bank notes from the market in a routine maner through banks.  
 

"The volume of the banknotes printed prior to 2005 still in circulation, is not significant enough to impact the general public in a large way," it said.

 

 The RBI has promised to monitor and review the process of withdrawal of old series notes so that the public is not inconvenienced in any manner. "This is not an attempt to demonetise," RBI governor Raghuram Rajan said on Thursday.

"It is an attempt to replace less effective notes with more effective notes. I understand people are making different interpretations. Unfortunately that
should not be the interpretation."  

source : The ETB