RBI directive said pre-2005 notes were to be with- drawn and estab- lishments could stop accepting them from April 1
Restaurants, bars, shops, and even small provision stores are rejecting currency notes printed prior to 2005.
While a recent directive from the Reserve Bank of India (RBI) said such notes are to be withdrawn and establishments can stop accepting them from April 1, several businesses in the city have already stopped accepting such notes.
Software professional Aman Deep said, on a recent trip to a shopping mall in the city, he had to pay by credit card after the staff at the counter refused to take a Rs. 500 note.
“He turned the note over and said the year of printing was not mentioned, and asked for another note. When we questioned it, he said he was only acting as per RBI instructions,” he said.
Some restaurants and bars too have begun to reject such notes. Residents wonder if this is illegal, because according to the RBI, these notes can remain in circulation till March 31, 2014. After this date, the public can approach banks to exchange the old notes, according to RBI.
However, some banks too seem averse to exchanging the notes. V. Rani, a resident of Perambur, said she recently withdrew some money from an ATM and found one of the notes did not have the year of printing. When she took it to the bank, officials asked her to deposit the money in her account. “They refused to exchange it for another note, a much simpler thing to do,” she said.
Sources in the RBI said such notes will continue to be legal tender even after March. The initiative to take back these notes is merely aimed at providing good quality notes with more security features.
At any rate, traders cannot refuse such notes as transactions using them are allowed till March 31. After that too, the RBI only recommends that consumers exchange old notes for newer ones with better security features.
A.M. Vikramaraja, State president, Tamil Nadu Traders Association, said traders welcome RBI’s move as it will help weed out counterfeit currency.
M. Venkadasubbu, president, Tamil Nadu Hotels Association, said it will be easier for traders if banks themselves filter such notes.
An official of State Bank of Hyderabad said they accept soiled notes but not many customers have approached them with exchanging pre-2005 currency notes.
Officials at Indian Overseas Bank branches are suggesting depositing the money in customer accounts. Officials said they will accept any number of notes for exchange until June 30 after which non-customers will have to produce identity proof to exchange more than 10 notes of Rs. 500 and Rs. 100 denominations.