"From April 1, 2014, the public will be required to approach banks for exchanging these notes. Banks will provide exchange facility for these notes until further communication," the RBI said in a release earlier this year.
These notes can be freely exchanged at any bank branch till January 1, 2015. The procedure to be followed after January 1, 2015, shall be communicated by RBI in due course.
What has the RBI decided to withdraw these notes?
According to the Reserve Bank of India website the central bank has decided to withdraw from circulation all banknotes issued prior to 2005 as they have fewer security features as compared to banknotes printed after 2005.
The withdrawal exercise is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time. The RBI has already been withdrawing these banknotes in a routine manner through banks. It is estimated that the volume of such banknotes (pre-2005) in circulation is not significant enough to impact the general public in a large way and the members of public may exchange the pre-2005 series banknotes at bank branches at their convenience.
Banks have been advised to stop re-issue of the pre-2005 series notes over the counters/through ATMs and they have been instructed to forward them to the Reserve Bank of India.