Anyone can easily distinguish rupee notes issued before 2005 as they do not have the year of printing on reverse side, which is visible for notes printed after 2005 in a small font at the middle of the bottom row in notes
The Reserve Bank of India (RBI) has decided to withdraw all currency notes issued prior to 2005, including Rs500 and Rs1,000 denominations, from 31st March. This move is apparently aimed at curbing black money and fake currencies.
In an advisory, the RBI said, "After 31 March 2014, it (RBI) will completely withdraw from circulation all bank notes issued prior to 2005. From 1 April 2014, the public will be required to approach banks for exchanging these notes".
The public can easily distinguish the currency notes issued before 2005 as they do not have the year of printing on reverse side. The year of printing in a small font is visible at the middle of the bottom row in notes issued after 2005.
Asking people not to panic and cooperate in the withdrawal process, the RBI said old notes will continue to be legal and can be exchanged in any bank after 1st April.
"From 1 April 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication," it said.
From 1 July 2014, persons seeking exchange of more than 10 pieces of Rs500 and Rs1,000 notes will have to furnish proof of identity and residence to the bank.
Although the RBI did not give any reason for withdrawal of pre-2005 currency notes, the move is expected to unearth black money held in cash.
As the new currency notes have added security features, they would help in curbing the menace of fake currency.
At present, currency notes in denominations of Rs5, Rs10, Rs20, Rs50, Rs100, Rs500 and Rs1,000 are issued.
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As very correctly pointed out by Mr Hemant, there is NO need to replace lower deonomination notes; preferably, the RBI should start with Rs 1000 and Rs 500, and once the bulk is withdrawn, they may consider
Rs 100. Lower denominations have truly no consequence in the "fake" currency area, as the counterfeiters would rather spend their time "perfecting" to make higher deonominations. After all, they are are aided by Government experts in Pakistan from where these have been coming for sometime, and Moneylife has covered this aspect in several articles in the last few months.
What RBI needs to do is to atleast clarify their views and plans on the polymer notes, which they actually test marketed in a few selected cities 8/9 months ago. Better still, they need to identify the name of the officer to whom we may raise our views on the subject.
If, in this way, black money can be taken out,it is atleast a good step in the right direction, and we must appreciate this intelligent move by RBI.