RBI to phase out Rs 500 notes of 1996 series

In the bid to fight ‘economic terrorism’ that is running across the country in the form of ‘fake currencies’, the Reserve Bank of India (RBI) on Thursday released a press note to phase out all the Rs.500 notes of 1996 series from the market. These notes would be replaced with ‘Gandhi’ series notes, which are more secure and uneasy to counterfeit.

Releasing a 22-page master circular to all banks, the apex bank has directed that once the note of Rs.500 of 1996 series would be deposited, it would not be reissued in the market and would be seized forever.

The banks would replace these notes from the more secured series of notes of the same denomination or other denomination like Rs.50 or Rs.100, as per customers’ demand or availability in the branch. Thus, gradually these notes would be phased out completely from the market, specified RBI.

To protect the public from rumours, RBI has clarified that all these notes of Rs. 500 of 1996 series would be considered ‘valid’ like other series notes. This move of RBI would save the public from rushing to the banks to replace their notes immediately.

The Bank has not set any time limit for completing this process. Moreover, it has also clarified that other denomination of notes like Rs.10, 20, 50 and 100 would not be exchanged at present.

For making awareness among the public and banks on spotting fake currencies, RBI has been issuing procedures of scrutinising the currency from time to time on all-major means of communications including newspapers, radio and television. The ‘checking measure’ is also available on ‘RBI’s official website.

This move of RBI came in response to the two continuous ‘fake currency’ rackets unearthed simultaneously in Uttar Pradesh this month.

On August 04, 2008, the vigilance department seized counterfeit notes of worth Rs.20-lakh from ‘Dumariaganj’ (only 20-km far from Nepal border) branch of State Bank of India- the leading public sector bank of India in Siddhartha Nagar district of Uttar Pradesh. And just three days later on August 07, another fake currency racket was exposed in Aligarh branch of the SBI bank seizing fake currency of worth Rs. 42.26.

The intelligence bureau, on the other hand, has reported that several rackets are running with a whopping worth of USD 51-billion in different parts of the country.