The Reserve Bank of India (RBI) has announced the decision to withdraw from circulation all currency notes printed prior to 2005. It is a standard international practice to withdraw old series of bank-notes from time to time. The reason for withdrawal of bank-notes printed prior to 2005 is to remove them from the market as they have fewer security features compared to bank-notes printed after 2005. It is expected that this will prevent counterfeiting of bank-notes. The RBI has already been withdrawing these notes from the market in a routine manner through banks. In RBI’s view, the volume of the bank-notes printed prior to 2005 today, still in circulation, is not significant enough to impact general public in a large way.

The schedule of withdrawal announced by RBI is as under:

• All older series of bank-notes issued prior to 2005 would be acceptable for all kinds of monetary transactions only till March 31, 2014.
• Thereafter the public will be required to approach bank branches which would provide them exchange facilities on an ongoing basis.
• From July 1, 2014 onwards, members of public can exchange any number of these old series notes from the bank branches where they have their account. However, non-customers would have to furnish their identity and residence proof to the Bank to exchange more than 10 pieces of Rs. 500 and Rs. 1000 notes.
• These notes will continue to be legal tender and, therefore, no end date has been specified for the exercise.