RBI Sights Security Reason for Withdrawal of Pre-2005 Notes - The New Indian Express

RBI Sights Security Reason for Withdrawal of Pre-2005 Notes

Published: 25th January 2014 06:00 AM

Last Updated: 25th January 2014 10:37 AM

The Reserve Bank of India has issued a clarification on its decision to withdraw bank notes printed before 2005 saying that the rationale behind this move is to remove these banknotes from the market because they have fewer security features compared to banknotes printed after 2005.

The clarification comes in the midst of political parties ascribing different reasons for the RBI’s decision and labeling the measure anti-poor. It has also been said that the central bank has taken this measure to reduce black money in the country.

The central bank on its part, however, said that it is standard international practice to withdraw old series notes. Further, it has been withdrawing these bank notes from the market in a routine manner through banks.

In the clarification, the central bank said, “In Reserve Bank’s view, the volume of the banknotes printed prior to 2005 today, still in circulation, is not significant enough to impact the general public in a large way”.

The RBI has also advised the public to start exchanging notes at their own convenience. It said, “Even July 1, 2014 onwards, members of public can exchange any number of these old series notes from the bank branches where they have their accounts”.

The central bank has said that it will continue to monitor and review the process of withdrawal of old series notes so that the public is not inconvenienced in any manner. It re-iterated that notes printed prior to 2005 will continue to be legal tender.

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