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The Reserve Bank of India (RBI) on Thursday issued new guidelines regarding the exchange and compensation for the mutilated currency. The new guidelines are strictly limited to the new Mahatma Gandhi series that has come into circulation after the demonetisation. This has come a month after RBI announced that 99.3% of the banned currency had returned to the banking system.
RBI on September 6 made amendments to the Reserve Bank of India (Note Refund) Rules, 2009, to enable the public to exchange mutilated notes in Mahatma Gandhi (new) series, which are smaller in size compared to the earlier series of notes.
The new guidelines have come after both vendors and consumers had stopped accepting the new notes of high denominations, like Rs 200 and Rs 2000, with even minor deformities. This had led to the mutilated or torn currency turn into deadwood and completely staying out of circulation. In order to tackle this growing problem, the RBI has made amendments to the previous rules of note exchange.
As per the statement released by RBI, if a person brings a mutilated note of Rs 50 or more denomination that has been torn into two pieces and the two pieces of the same note individually have an area equal to or more than 40% of the total area of the note of that denomination, the person will be refunded with the full value of the note.
However, there is a condition applied to the Rs 2000 denomination. The value of a mutilated note of Rs 2000 may be refunded in half if the minimum undivided area of the single largest piece of the note is 88 square cm. The full value of the Rs 2000 denomination will only be refunded if the single largest piece of the mutilated note is 88 square cm or more.
Note: The total area of the Rs 2000 note is roughly 110 square cm.