Banknotes are very important as they are used for all essential transactions and passed from hand to hand. But what happens if these notes get damaged? Will they become completely invalid? This can be a big concern for many.
After burnt notes were found outside the house of former Delhi High Court judge Justice Verma, many questions have arisen in people’s minds. Do banks exchange burnt notes? How much of a burnt note can be exchanged? What are the Reserve Bank of India’s (RBI) rules on this? Also, learn about RBI guidelines on colored and torn notes and how much value can be recovered from damaged currency.
What Does the RBI Circular Say?
In 2017, the Reserve Bank of India issued a circular outlining the rules for exchanging damaged or old notes. According to the circular, no bank—whether government or private—can refuse to exchange torn or old notes. However, if the note is in very poor condition, it may not be accepted at the bank and should be submitted to the RBI branch designated for this purpose.
Burnt Notes and Their Exchange Process
If a note is burnt up to 50%, it can be exchanged at the bank. However, if more than 50% of the note is burnt, it will not be accepted at the bank. In such cases, the note should be submitted to the RBI issuing office for verification. After investigation, RBI can refund the value of the note. For example, if you submit a burnt ₹500 note, RBI may give you ₹300 in return.
Notes with Political Messages or Defaced Details
If a note has been deliberately mutilated or has political messages, slogans, or any defaced parts, such as the name of the issuing authority or the Governor’s signature, the bank can refuse to exchange it. These notes are considered invalid.
Exchanging Old or Torn Notes
- Old Notes: Very old notes can only be exchanged at select banks.
- Partially torn or Soiled Notes: If a note is torn or soiled but still identifiable, it can be exchanged at any bank.
- Missing Parts: If a note is missing a part, it will be inspected, and the bank may accept it after verifying the condition.
- Oil or Paint Stains: If a note has oil or paint stains but the identifying features (like number panels) are intact, it can still be exchanged at the bank.
Limits on the Number of Notes for Exchange
The RBI rules state that only 20 mutilated or burnt notes can be exchanged at one time. If the notes are of a high denomination, the total value should not exceed ₹5,000. If you wish to exchange more than this or the amount is higher, you must submit a written request to the branch manager, and the exchange will only be done with his approval.
Filing a Complaint if Rejected
If a bank refuses to accept your damaged note, you can file a complaint by giving a missed call to the RBI customer care number 14440. Alternatively, you can visit the RBI office to resolve the issue.