The Reserve Bank of India (RBI) on Wednesday announced it would withdraw all pre-2005 currency notes from the economic system come March 31 this year. Also read: RBI to withdraw all pre-2005 currency notes Here’s a quick FAQ to help you understand the issue:
Q: Will my currency notes become invalid from April 1? A: Partly. While you cannot use them for your normal transactions, you will still be able to go to a bank and have them exchanged.
Q: Till when can I have my notes exchanged at the bank? A: After July, persons seeking exchange of more than 10 pieces of Rs 500 and Rs 1,000 notes will have to furnish proof of identity and residence to the bank.
Q: How can I tell whether a note is pre- or post-2005? A: All notes printed after 2005 have the year printed in the middle of the bottom row. Pre-2005 notes do not have this feature.
Q: Why did RBI decide only on 2005 as the cutoff year? A: Notes issued since 2005 have a different design and colour and this will bring uniformity to the cash system. They also have more security features to tell apart from fakes such as added watermark, etc. These notes are thus better in fighting the counterfeit currency menace.
Q: In what denominations do pre-2005 notes exist? A: Pre-2005 notes in all current denominations -- from Rs 5 to Rs 1,000 -- are in circulation.
Q: What will RBI do to the pre-2005 notes withdrawn from the system? A: Central banks typically destroy withdraw currency notes by shredding them.
Q: What is the motive behind the RBI move? A: While the central bank has not given an explanation, it is said the move is fight the counterfeit-currencies issue as well as to flush out black money from before 2005 that could still be held in cash.
Q: What is the average lifespan of currency notes? A: There is no official declaration on this. In the US, the estimated lifespan of a currency tender ranges from about six years for the USD 1 bill to 15 years for the USD 100 bill, according to the Federal Reserve website.