Reserve Bank of India Governor Raghuram Rajan said Tuesday its decision to withdraw currency notes issued before 2005 was aimed at curbing counterfeits and had nothing to do with curbing black money or tax evasion.
"It is not intended to get at black money, tax evasion etc... this is a technical action," Rajan said at a media conference after releasing the third quarter review of the monetary policy, adding that it was aimed at curbing counterfeits.
However, the governor clarified that the statement should not be seen in the context that the RBI supports black money or tax evasion. "That is not to say that we support black money."
"We have to keep improving the security features. Which is why the notes will be withdrawn," he added.
The RBI last week announced that the cunotes issued before 2005 will be completely withdrawn from circulation by the end of the current financial year ending March 31.
From April 1, 2014 public would be required to approach banks for exchanging these notes.
However, the RBI has clarified that the notes issued before 2005 will continue to be legal tender and can be exchanged at banks.
From July 1, 2014, however, to exchange more than 10 pieces of Rs500 and Rs.1,000 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.