RBI extends deadline of exchanging notes printed before 2005

The Reserve Bank of India extended the deadline of exchanging soiled currency printed before 2005 to January 1, 2015, from July this year.

"It 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.

These notes will be accepted by banks without strings till January. Earlier, the RBI had said exchange of 10 such notes or more beyond July would need identity proof. The pullout of these notes is to reduce instances of counterfeiting and not a measure to bring out unaccounted or black money before the upcoming general elections.

The central bank since 2005 has introduced notes with more security features. "The decision to withdraw pre-2005 currency notes after March 31 is not guided by politics and elections,"' Governor Raghuram Rajan has said. "It was a long-standing demand of the finance ministry. There are security factors attached with the decision."

He drew a distinction between the move and demonetising. "This is not an attempt to demonetise," he said. "It's an attempt to replace less effective notes with more effective notes. I understand people are making different interpretations. ...that should not be the interpretation." 

Source:-The Economic Times