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Pre-2005 banknotes: 6 more months on life support system

In early 2014, RBI had announced the complete withdrawal of the old series of notes, issued prior to 2005, from the circulation.

Since the new banknotes, in the Mahatma Gandhi series, were in circulation for more a decade and have better security features, it was decided to withdraw the old design notes.

This is also in line with the international practice of not having multiple series of currency notes in circulation.

Initially, in Feb 2014, RBI had set the last date for withdrawal as Mar 31, 2014.

Then, in Mar 2014, the last date was extended to Dec 31, 2014.

Subsequently, in Dec 2014, another extension was granted till Jun 30, 2015.

And now comes the announcement of one more extension... till Dec 31, 2015.

During the course of last around 15-18 months, RBI has already withdrawn a majority of the pre-2005 currency notes through the banking system. However, some portion still remains with the general public. 

While announcing the extension, RBI has sought the co-operation of everyone in early withdrawal of the remaining pre-2005 banknotes.

In this regards, RBI has reiterated that
- people can deposit the old series of banknotes in their bank accounts
- alternatively, they can exchange them for new notes at any bank branch convenient to them for the full value
- all such notes continue to remain legal tender

It has also stated that public will not be inconvenienced in any manner whatsoever during the process.

In one of my earlier blogs on this subject Date For Withdrawal Of Pre-2005 Notes Extended... I had pointed out how to distinguish between the pre-2005 banknotes and the new Mahatma Gandhi series

This, of course, it is pretty simple. A note, with the 'year of printing' at the back in the middle of the bottom row, is a valid note. Whereas notes that DO NOT have the 'year' printed on the reverse side are the ones that belong to the pre-2005 era; and are to be withdrawn from circulation.

In addition, I had listed the various Do's and Don'ts for the banks in this regards.

Briefly, 
- Banks should ensure that either the old banknotes are exchanged for the new ones or the customer's account duly credited for the full value, whenever presented with the same. Everyone must be treated equally whether s/he is an account-holder or not. And all bank branches must accept and exchange the old notes.

- No charges should be levied for such transactions. Nor should there be any restriction on the number of banknotes to be exchanged by a person. In addition, no old notes should be re-issued or re-circulated through the counters or ATMs.  

Well, let's hope that RBI is successful in its attempt to withdraw the balance remaining pre-2005 banknotes by the end of this year and close this chapter forever.

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