Pre-2005 Currency Notes to be withdrawn - Don't Panic, says RBI
CAUTION to the Bribe Takers: If you are taking bribes in bank notes with the signature of the RBI Governor, be careful and check every note to ensure that it has been issued after 2005, for the Reserve Bank of India has decided to withdraw completely all bank notes issued prior to the year 2005.
Come April and the citizens of the Republic will be required to exchange these notes from Banks which will provide the exchange facility until further communication.
It is not as if these notes will cease to be legal tender – only thing is after 1st July 2014, if you want to exchange more than 10 pieces of Rs. 500 and Rs. 1000 notes, non-customers will have to furnish proof of identity and residence to the bank branch in which she/he wants to exchange the notes. Means if you are exchanging more than Rs. 15,000 – big brother will watch you.
RBI has appealed to the Public not to panic and requested them to actively co-operate in the withdrawal process.
What is the provocation behind this sudden proposal to withdraw the pre-2005 notes? Is to curb black money? Is the timing lethal – just before the General Elections? It is no secret that thousands of Crores (of black money) will be in circulation during the elections and in the distribution channels, counting of notes is a rare occurrence. And actually there is cut at source at every stage – for example if a Thousand Crores is to be sent to a State, actually only 900 Crores will go and when the 900 crores go to the Districts only about 800 crores will go – finally only about 500 Crores reach the voters. Well, this is a respectfully accepted loot in the trade and nobody complaints. Now, with millions of units of currency notes to be put in circulation, who will have the time and a safe place to check whether the notes were issued prior to 2005 or after. At least at that last level, people may refuse to accept the pre-2005 notes. What will they then do with all those bundles of pre-2005 notes? Can they exchange them in the banks during the thick of elections? Will the post 2005 notes now carry a premium in the market? And will the pre 2005 notes suffer a discount? And maybe the 100 rupee notes issued prior to 2005 will carry a premium as hassles like proof of identity and residence are applicable only for 500 and 1000 rupee notes.
If the whole Scheme is to discourage black money and misuse of money during elections, it is a laudable step – at least it will leave our wily politicians confused during the time when they need black money most – and there will be less money to spend during the 2014 elections and perhaps we can witness a more democratic election.
But will the RBI advisory be allowed to be implemented – if the politicians come to know about the implications, they will certainly ensure that the advisory is withdrawn or at least suspended till the elections are over to form the Government "buy the people".
How do you identify notes issued prior to 2005? It is very easy. Notes issued prior to 2005 do not have the year of printing on the reverse side of the note.
I checked in about Rs. 30,000 worth notes with me withdrawn from my bank during this month and I found that every one of them had the year of issue printed (obviously issued after 2005) and I am happy that all my notes are legal tender even after April, July 2014 and thereafter.
See from these pictures
Legal Corner Icon — the image was hosted by the publisher and was not captured.From now on, whenever you give a note, the recipient will see the reverse side and see if the year of issue is printed; he may not accept it if the year is not printed – a tough task indeed if you deal with too much of cash. And will this not create a scare, even if the RBI has asked us not to panic?