Monday, February 2, 2015

Pre-2005 Banknotes and MG-2005 Series

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Banknotes Series
Since Independence of India, three different series of banknotes are issued -

  1. Ashoka Pillar Banknotes - Issued in 1949
  2. Mahatma Gandhi (MG) Series 1996 - Issued in 1996
  3. Mahatma Gandhi (MG) Series 2005 - Issued from 2005 

MG Series - 2005 Banknotes
These series banknotes are issued in the denomination of Rs. 10, 20, 50, 100, 500 and 1000, and contain some additional new security features that MG Series-1996 doesn't have. Started from August 2005, MG Series - 2005 banknotes are currently being used in India.

It is very easy to distinguish MG-Series 2005 notes from its predecessors, because these notes bear the year of printing on the reverse side.

Withdrawal of Pre-2005 Banknotes
RBI changed the design of pre-2005 banknotes and introduce new security features primarily to minimize the risk of counterfeiting. So that the economy can be protected from counterfeiters or forgers.

Also, the withdrawal exercise is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time.

Public can visit any bank branch, or RBI Issue Office to exchange pre-2005 banknotes.

Recently, the deadline of January 1, 2015 has been extended to June 30, 2015 by RBI.

Situational Question
RBI has given a deadline for the exchange of pre-2005 banknotes. What will happen to those notes (that will still remain in circulation) after the deadline? Will those remain a legal tender?

RBI has clarified that the public can continue to freely use those notes for any transaction and can unhesitatingly receive those notes in payment, as all such notes continue to remain legal tender.

But public is encouraged to exchange pre-2005 notes with MG Series-2005 notes.

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