The Reserve Bank on Monday granted an additional nine months for the public to exchange currency notes printed before 2005, including Rs. 500 and Rs. 1,000 denominations, and set a deadline of January 1, 2015.
“RBI has also advised banks to facilitate the exchange of these notes for full value and without causing any inconvenience whatsoever to the public,” the central bank said in a release.
It clarified that the public “can continue to freely use these notes” for transactions and can unhesitatingly receive these notes in payment as all such notes remain legal tender.
The RBI on January 22 said it would withdraw from circulation all pre-2005 currency notes from April 1 and the public was advised to approach banks to exchange such notes.
Currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued after 2005, the year of printing is visible at the bottom of the reverse side.
The RBI said the withdrawal is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time.
“A majority of such notes have already been withdrawn through the banks and only a limited number of notes remain with the public” the RBI said.
The apex bank said it will monitor and review the withdrawal and exchange process so that the public is not inconvenienced in any manner.
Reserve Bank Governor Raghuram Rajan had earlier said the withdrawal was not an attempt at demonetisation, nor had it anything to do with the forthcoming general elections.
Post-2005 notes have added security features and help in curbing the menace of fake currency.
At present, currency notes are issued in denominations of Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000.
Earlier, the RBI had withdrawn a certain series of currency notes at the bank level but bearers were not asked to get them replaced.