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RBI to withdraw currency prior to 2005

moneyThe Reserve Bank of India announced that it will withdraw all currency notes issued before 2005. The process will start from 1 April, the central bank said. The move is part of the regulator’s strategy to counter fake currency notes ciruclating in the system and black money. According to RBI officials, the move is akin to demonetisation and will impact hoarders of cash (black money) and weed out fake currencies to a large extent from the system. According to RBI data the amount held by public as of 23 December 2005, was close to Rs 4 trillion and this figure stands at Rs 12 trillion as of 27 December 2013. It is estimated that nearly 15% of notes in circulation are fake notes. According to RBI spokesperson, the bank wants to bring about uniformity in the notes printed and hence such rationalizations were required. The RBI has been communicating with banks on the security features of new currency notes for a while now. This move is in a way admitting the vulnerability of duplicating notes issued earlier. People who have notes from 2005 or before, identifiable by the absence of any year printed on the bottom, will have to take it to any bank and provide address proof, if you don’t have a bank account. This will mean that those who have not declared their accumulated cash will now become accountable. It is not likely that there will be huge cache of such notes because it would have been exchanged for fresh notes in the last 10 years. If such notes without any year printed looks crisp and neat it is likely that they are fake. Also it is impossible to change these notes through hawala since such notes have lost value. All avenues of encashing these notes are blocked now.

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