Reserve Bank of India (RBI) to withdraw all currency notes issued before 2005 with an aim to curb black money, fake currencies.
RBI to withdraw all pre-2005 currency notes.
Hoax or Fact:
The messages circulating on social networking websites like Facebook and Twitter suggest that the Reserve Bank of India (RBI) is going to withdraw all currency notes issued before 2005 - with an aim to curb black money and fake currencies. Yes, it is a fact.
In a press release dated 22 Jan 2014, RBI Advisory notified that banknotes issued prior to 2005 will be withdrawn from circulation after March 31, 2014. As illustrated in the picture, the banknotes printed after 2005 will have the year printed on backside. From April 1, 2014, the public will be required to approach banks for exchanging the old notes before 2005 that do not have the year of printing on the reverse side.
The Reserve Bank of India has also clarified that the notes issued before 2005 will continue to be legal tender, and the banks are required to exchange the notes for their customers as well as for non-customers. However, for exchanging more than 10 pieces of 500 and 1000 rupees notes, non-customers are required to furnish proof of their identity and residence to the bank branch where he/she wants to exchange the notes.
Although the RBI did not mention any reason for the withdrawal of old notes in the press release, this move is believed to curb black money and fake currency, and is likely to hit currency hoarders and counterfeiters -- because the banknotes issued after 2005 have added security features that make counterfeiting difficult. According to bankers, this move from RBI would leave currency hoarders with no option but to liquidate their unaccounted holdings by spending or exchanging them, and will have the effect of flushing out black money and counterfeit notes, thereby capturing the "money flows" into the system.