Lok Sabha Question No. 4713 (UNSTARRED), answered on 2020-03-23
Subject: Exchange of Currency Notes
Ministry: FINANCE
Asked by: Gurjeet Singh Aujla

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO.4713 TO BE ANSWERED ON 23.03.2020

## Exchange of Currency Notes

4713. SHRI GURJEET SINGH AUJLA:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government has allowed banks to exchange soiled, mutilated and burnt currency notes;
- (b) if so, the details thereof along with the names of banks authorised to exchange such notes;
- (c)  whether  there  are  certain  conditions  for  exchange  of  currency  notes  including charging of fee, etc.; and
- (d) if so, the details thereof?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a) & (b) : Mutilated / soiled / damaged notes are exchanged in terms of Reserve Bank of India (Note Refund) Rules, 2009 (as amended in 2018).

RBI has advised all banks to exchange mutilated / soiled / damaged notes at all their  branches  vide  its  Master  Circular  on  'Facility  for  Exchange  of  Notes  &  Coins' DCM (NE)  No.G-2/  08.07.18/  2019-20  dated  July  01,  2019.However,  Small  Finance Banks and Payment Banks may exchange mutilated and defective notes at their option.

Notes  which  have  turned  extremely  brittle  or  are  badly  burnt,  charred  or inseparably stuck up together and, therefore, cannot withstand normal handling, shall not be accepted by the bank branches for exchange. Instead, the holders may be advised by the  banks  to  tender  these  notes  to  the  RBI  Issue  Office  concerned  where  they  will  be adjudicated under a Special Procedure.

(c )& (d) : A.Conditions for exchange of soiled notes are as follows :

- i. Notes presented in small number: Where the number of notes presented by a person is up to  20 pieces with a  maximum  value of Rs.5000 per  day, banks should exchange them over the counter, free of charge.
- ii. Notes  presented  in  bulk:  Where  the  number  of  notes  presented  by  a  person exceeds 20 pieces or Rs.5000 in value per day, banks may accept them, against receipt,  for  value  to  be  credited  later.  Banks  may  levy  service  charges  as permitted in Master Circular on Customer Service in Banks (DBR.No.Leg.BC.21/09.07.006/2015-16 dated July 1, 2015). In case tendered value is above Rs.50000, banks are expected to take the usual precautions.
- B. Conditions for exchange of mutilated and imperfect notes are as follows:
- i. While designated branches may continue to follow the procedure as laid down in Part III of Reserve Bank of India (Note Refund) Rules, 2009 for exchanging mutilated  and  imperfect  notes  and  issue  receipt  for  the  notes  presented  for adjudication, non-chest branches are required to follow the following procedure for notes presented in small numbers and in bulk.
- a) Notes  presented  in  small  number:  Where  the  number  of  notes presented by a person is up to 5 pieces, non-chest branches should normally adjudicate the notes as per the procedure laid down in Part III of Reserve Bank of India (Note Refund) Rules, 2009and pay the exchange value over the  counter.  If  the  non-chest  branches  are  not  able  to  adjudicate  the

mutilated notes, the notes may be received against a receipt and sent to the linked  currency  chest  branch  for  adjudication.  The  probable  date  of payment should be informed to the tenderers on the receipt itself and the same should not exceed 30 days. Bank account details should be obtained from the tenderers for crediting the exchange value by electronic means.

b) Notes presented in bulk: Where the number of notes presented by a person is more than 5 pieces not exceeding Rs.5000 in value, the tenderer should  be  advised  by  Banks  to  send  such  notes  to  nearby  currency  chest branch by insured post giving his / her bank account details  or get them exchanged  thereat  in  person.  All  other  persons  tendering  mutilated  notes whose  value  exceeds  Rs.5000  should  be  advised  by  Banks  to  approach nearby currency chest branch. Currency chest branches receiving mutilated notes through insured post should credit the exchange value to the account of sender by electronic means within 30 days of receipt of notes.

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