Q: Which are the banks authorised to exchange notes coins?
R: All the bank branches in entire India are mandated to provide facility for exchange of notes and coins to the members of public. Banks are also directed by the banking regulator (RBI) to issue fresh/good quality notes and coins of all denominations whenever customers demand for.
Q: Whether a bank branch can refuse to exchange soiled/mutilated/defective notes?
R: No. Banks cannot refuse to exchange soiled, mutilated, defective notes. However, Small Finance Banks and Payment Banks may or may not exchange mutilated and defective notes at their discretion.
Q: Whether banks can refuse coins and notes either for transactions or exchange?
R: None of the bank branches should refuse to accept small denomination notes and / or coins tendered at their counter either for transactions or exchange on any working days. However, RBI advises banks to preferably accept coins, particularly, in the denominations of Rs.1 and 2, by weighment. However, accepting coins packed in sachets of 100 each would perhaps be more convenient for the cashiers as well as the customers. Such sachets may be kept at the counters and made available to the customers, it said. The central bank circular further advised that scheme of providing exchange facility by a few select currency chest branches on one of the Sundays in a month will remain unchanged. Currently, all coins in the denomination of 50 paise, Re. 1/-, 2/-, 5/-, 10/- and 20/- of various sizes, theme and design issued from time to time by the Government of India continue to be legal tender. Branches of all the banks are required to display at their branch premises, at a prominent place, a board indicating the availability of note and coin exchange facility with the legend, “SOILED/MUTILATED NOTES AND COINS ARE ACCEPTED AND EXCHANGED HERE”. Banks should ensure that all their branches provide facility for exchange of notes and coins not only to their customers but also others. However, they should ensure that the note exchange facility is not cornered by money changers / dealers in defective notes.
Q: What is a soiled note?
R: A ‘soiled note’ means a note which has become dirty due to normal wear and tear and also includes a two piece note pasted together wherein both the pieces presented belong to the same note and form the entire note with no essential feature missing. These notes should be accepted over bank counters in payment of Government dues and for credit to accounts of the public maintained with banks. These notes should not be issued to the public as re-issuable notes.
Q: What is the procedure for exchange of soiled notes?
R: In case the number of notes up to 20 pieces with a maximum value of Rs.5000 per day, a person may exchange soiled notes over the bank counter, free of charge.When 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 per RBI guidelines from time to time. Further, in case tendered value is above Rs.50000, banks are expected to take the usual precautions while accepting them.
Q: What is a mutilated note?
R: A mutilated note is a note of which a portion is missing or which is composed of more than two pieces.
Q: What is the procedure for presentation and passing mutilated notes?
R: Mutilated notes may be presented at any of the bank branches. Designated branches of currency chests of the banks follow the procedure as laid down in Part III of NRR, 2009 (www.rbi.org.in→Publications→Occassional) for exchanging mutilated and imperfect notes and issue a receipt for the notes presented for adjudication. The non-chest branches may normally accept such notes presented by a person up to 5 pieces that may adjudicate and pay exchange value. If they 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. Bank account details (a/c no, branch name, IFSC, etc.) to be obtained from the tenderers for crediting the exchange value by electronic means. 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 to send such notes to nearby currency chest branch by insured post giving his / her bank account details (a/c no, branch name, IFSC, etc.) or get them exchanged there in person. The probable date of payment should not be more than 30 days as per RBI guidelines.
Q: Whether bank branches accept extremely brittle, burnt, charred, stuck up Notes?
R: Banks do not accept such notes which cannot withstand normal handling. The holders of such notes may be asked to tender such notes to the Issue Office concerned where they will be adjudicated under a Special Procedure
Q: Whether banks accept notes with slogans/ scribbling/ stain etc.?
R: Notes with slogans, political or religious messages, scribbling, stain (including colour stain) etc. are unfit for usage and circulation and go against Clean Note Policy of RBI. Such notes may be remitted to currency chest for onward remittance to RBI offices. However, any note with slogans and message of a political or religious nature written across it ceases to be a legal tender and the claim on such a note will be rejected under Rule 6(3) (iii) of NRR, 2009. Similarly, notes which are disfigured may also be rejected under Rule 6(3) (ii) of NRR, 2009.
Q: Is there any restriction on payment of deliberately cut notes?
R: No payment should be made for exchange value of notes, which are found to be deliberately cut, torn, altered or tampered with. They should be rejected under Rule 6(3)(ii) of the NRR, 2009, if presented for payment. Even though it is not possible to precisely define deliberately cut notes, a close look at such notes will clearly reveal any deliberate fraudulent intention, as the manner in which such notes are mutilated will follow a broad uniformity in the shape/location of missing portions of the notes, especially when the notes are tendered in large numbers. The details of the case such as the name of the tenderer, the number of notes tendered and their denominations should be reported thereafter to the Deputy/General Manager, Issue Department, under whose jurisdiction the branch falls. The matter should also be reported to local police in case a large number of such notes are tendered.
Source: RBI Master Circular – Facility for Exchange of Notes and Coins dated July 01, 2020