Here's how to exchange damaged currency notes, know what RBI rule states

In India we use notes and coins of different denominations for all financial transactions. Since the value of coins is low, most of the time we use notes for the big transactions. Notes are made of a special type of paper, which becomes lighter after a time, and there are chances of its getting torn.

So if you also possess notes which are torn, then there is nothing to worry because the government also provides the facility to get it replaced. Reserve Bank of India has introduced notes of different denominations of Rs 5, 10, 50, 100, 500 in India. 

After demonetisation in the year 2017, new Rs 200, Rs 500 and Rs 2000 notes were introduced in the market. The Rs 1000 note was however, discontinued. Apart from the old Rs 500 and Rs 1000 notes, all other torn notes can be exchanged with some value of money in return.

Read | Want to exchange torn currency notes? Check out the process, rules of RBI

Conditions by RBI on note exchange

The worse the note is, its value will be lower.

If a person has more than 20 damaged notes and their total is more than Rs 5,000, the transaction fee for the same will be charged.

It is important to see if the note shows security symbols before going for an exchange

Different rules for each note

How much amount will be received in exchange for a torn note, is decided by the price of the note and how much part of it is present. For example, 88sqcm of Rs 2000 note gets full refund, 44sqcm gets half return. The full note of Rs 2000 is 109.56sqcm.

On the other hand, giving 78sqcm part of a torn note of Rs 200 will give full return, while half return is given on 39sqcm of Rs 200 note.

Which notes can be changed?

According to the rules of RBI, three types of notes can be exchanged.

First, the one whose colour got faded due to washing or due to circulation among many people.

The second type of notes that can be exchanged are those that have been torn apart and their fragments are present.

The third type are the mismatch ones. Meaning, wrong print note made by joining two different pieces of the note.

Banks can also refuse to exchange notes in very bad condition, whose numbers are not possible to read.

Is it forbidden to write on the note?

According to the rules of the Reserve Bank of India, if something is written on the note even then it is valid. But if the message written on it is politically motivated, then it will not be considered as a legal tender.

How to exchange notes?

Notes can be exchanged at any bank branch. For this, you can also go to Reserve Bank office. But do this only if you need to change 20 or more notes. Some shops in the locality also exchange mutilated notes. However, their commission is high.

Provisions in case bank violates rules

If the bank refuses to exchange the notes, an online complaint can be registered. Action will be taken against the bank employees.

Based on the complaint of the customer, the bank may pay damages up to Rs 10,000.