Reserve Bank of India (Note Refund) Rules, 2009
As per Section 28 of the Reserve Bank of India Act, 1934:
Notwithstanding anything contained in any enactment or rule of law to the contrary, no person shall of right be entitled to recover from the Central Government or the Bank, the value of any lost, stolen, mutilated or imperfect currency note, provided that the Bank may, with the previous sanction of the Central Government, prescribe the circumstances in and the conditions and limitations subject to which the value of such currency notes or bank notes may be refunded as of grace and the rules made under this proviso shall be laid on the table of Parliament.
Now the RBI has notified the Reserve Bank of India (Note Refund) Rules, 2009.
The Reserve Bank has been extending facilities to the public for exchanging cut and mutilated notes at all its Issue Offices and currency chest branches of commercial banks. In order to make the Note Refund Rules easy to understand and to apply, these have been comprehensively revised and simplified. It has also been decided that any officer of the designated branch can adjudicate mutilated notes presented thereat. RBI hopes that simplification and liberalisation of the Rules would help both, the prescribed officers as well as the tenderers of mutilated notes to easily comprehend the revised Rules and enable the former to apply the Note Refund Rules without leaving any scope for subjectivity.
While the facility for exchange of soiled notes is to be provided by all banks at all of their branches, the facility of exchange of mutilated notes would be available at designated bank branch/ es (including cooperative banks and RRBs ) to all tenderers whether they are account holders or not. This is a duty that the banking system as a whole owes to the public. It needs no emphasis that the object of simplification of RBI Note Refund Rules and its extension is to help members of the public exchange the cut/mutilated notes in their possession without difficulty.