A common concern for many is whether banks accept torn or damaged notes.
However, individuals need not worry as they can exchange their soiled, mutilated, or defective notes at any bank across the country. Yet, the rules vary depending on whether the exchange is for small amounts or in bulk.
Soiled notes refer to currency that has become dirty due to regular use, including notes made up of two pieces pasted together where both parts belong to the same note and all essential features are intact.
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These notes can be exchanged at bank counters for government dues or credited to public bank accounts.
Mutilated notes are those with missing portions or made up of more than two pieces. Banks accept these at their branches to prevent private money changers or dealers from monopolising exchange services.
Notes that are extremely brittle, burnt, charred, or inseparably stuck together and cannot withstand normal handling will not be accepted at bank branches. Holders should submit these to the Reserve Bank of India (RBI) for evaluation under a special procedure.
Exchange limits
For individuals exchanging up to 20 notes worth Rs 5,000 per day, banks provide free over-the-counter services. However, for amounts exceeding this, banks accept the notes against receipt and levy service charges. Precautions are taken for amounts over Rs 50,000.
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Exchange of mutilated or imperfect Notes
For Small Number of Notes – Non-chest branches assess and pay for up to five damaged notes over the counter.
If they cannot decide, the notes are sent to associated currency chest branches for evaluation.
The person receives a receipt indicating the expected payment date (within 30 days) and is asked for bank account details for electronic crediting.
For Bulk Exchange – According to RBI‘s Master Circular (April 1, 2022), individuals can send more than five pieces of notes (up to Rs 5,000 value) to nearby currency chest branches via insured post with bank account details for electronic crediting.
For amounts exceeding Rs 5,000, individuals should directly approach currency chest branches. The exchange value is credited electronically within 30 days of receipt of the notes.
