Saddled With Soiled, Mutilated Currency Notes? Here’s How To Exchange Them For Fresh Ones

Notes that you carry on your person might be soiled, deformed, torn, or have writings scribbled on them. Only in an emergency, like having to pay for a taxi with cash, do you realise that the notes are damaged and won’t be accepted.

Any bank branch will exchange some of these notes with fresh ones. So it is better to replenish your cash stash with clean notes whenever you get spare time. The rules for exchanging notes vary depending on the type of notes you hold.

A soiled note refers to a note that has become dirty over time due to usage. It can also mean a note that consists of two pieces pasted together, both of which belong to the same note, and form the entire note with no essential features missing.

RBI Rules

Bank branches across India are mandated to exchange soiled, mutilated or defective notes from public more actively and vigorously. So, there is no need for them to approach the RBI Regional Office, the central bank says. But when it comes to defective or mutilated notes, small finance banks and payment banks may exchange them at their option, RBI says.

Do note that if you have any note with political or religious message on it, no claim on the notes will be entertained. Also, if the banknote is “disfigured”, it may not be accepted. However, if there is just some scribbling or stain on the banknote, it is still legal lender and you can still use it or exchange it at any bank.

Procedure For Soiled Notes

All banks are authorised to accept soiled banknotes at full value. These notes should be accepted over bank counters in payment of government dues and for credit to accounts of the public maintained with banks. 

“However, in no case, these notes should be issued to the public as re-issuable notes and they shall be deposited in currency chests for onward transmission to RBI offices as soiled note remittances for further processing,” the RBI says.

If you have up to 20 notes that are worth less than Rs. 5,000, you can exchange them for free at the bank counter. But if you have more than 20 notes, or they are worth more than Rs. 5,000, you may have to pay a fee and get a receipt for the same. The value will be credited later into your account. 

“In case tendered value is above Rs. 50,000, banks are expected to take the usual precautions,” RBI says.

Mutilated Notes

If a person has up to five damaged notes, they can exchange them at the non-chest branch and get paid immediately. If the branch is unable to adjudicate the extent of damage, the notes can be sent to the linked currency chest branch where adjudication will be done. 

If a person has more than five damaged notes worth up to Rs. 5,000, they can either send them to a nearby currency chest branch by insured post or exchange them in person. For notes worth more than Rs. 5,000, individuals are advised to approach the nearest currency chest branch. The currency chest branches will credit the exchange value to the sender’s bank account within 30 days of receiving the damaged notes.

Severely Damaged Notes

Notes which have turned extremely brittle or are badly burnt, charred or inseparably stuck up together and, therefore, cannot withstand normal handling, shall not be accepted by the bank branches for exchange. Instead, the holders shall be advised to tender these notes to the Issue Office of RBI concerned where they will be adjudicated under a Special Procedure.