More than a month after issuing new ₹2,000 and ₹500 notes, the Reserve Bank of India is yet to frame refund rules for them.
This could amount to a violation of the RBI Act as note refund rules are mandatory if RBI offices and designated banks are to accept soiled notes for exchange.
“The central office of the RBI has directed regional offices and banks not to accept over the counter any soiled new notes of ₹2,000 and ₹500,” said a top RBI source, on condition of anonymity.
These directions came after a regional office accepted some soiled notes of ₹2,000 and destroyed them as per the old procedure.
The Reserve Bank of India (Note Refund Rules) 2009, which were updated on July 11, 2016 on its portal, do not list the newly issued denomination of ₹2,000 while the measurements given pertain only to the withdrawn notes of ₹1,000 and ₹500 denomination.
The current situation contradicts the RBI’s own regulation, based on the Reserve Bank of India Act, 1934 (2 of 1934). It says that the exchange of soiled notes is a “duty that the banking system as a whole owes to the public.”
“While the facility for exchange of soiled notes is to be provided by all banks at all of their branches, the facility of exchange of mutilated notes would be available at designated bank branches (including cooperative banks and RRBs) to all tenderers whether they are account-holders or not. This is a duty that the banking system as a whole owes to the public,” it emphasises.
The delay in coming out with the new note refund rules is attributed to the difference in the dimensions of the new notes and the withdrawn ones, say sources. The value of a mutilated bank note is ascertained by measuring the damaged part against a grid-based system.
Said an SBI offcer: “Our enquiries with the RBI indicate no time-frame for new refund rules. Till then even we cannot accept new soiled notes for exchange.”