Have Rs 200, Rs 2000 notes? There is a problem and here is why you should worry

Spanking new Rs 200 and Rs 2000 currency notes have been circulated widely after the demonetisation drive. They are eye catching indeed! However, there is a problem with these notes that can cost you plenty! If you are in possession of soiled banknotes of Rs 200 and Rs 2,000 denominations, you cannot exchange them from a bank counter as the latter is not in a position to do so due to the lack of the requisite exchange rules not being amended so far, said an Economic Times report. Since the exchange of mutilated and imperfect notes is governed by Reserve Bank of India (Note Refund) Rules, under Section 28 of the RBI Act which specifies currency notes of Rs 5, Rs 10, Rs 50, Rs 100, Rs 500, Rs 1,000, Rs 5,000 and Rs 10,000 denominations, the list however does not mention Rs 200 and Rs 2,000 notes, said the report. 
 
It may be noted that Rs 2,000 notes were issued soon after demonetisation of Rs 500 and Rs 1000 notes was announced on November 8, 2016. Rs 200 notes were launched in August, 2017. There are about Rs 6.70 lakh crore of Rs 2,000 notes in circulation and the Reserve Bank of India has stopped printing fresh ones, economic affairs secretary Subhash C Garg stated on April 17. Bankers say there have been a few cases of mutilated notes coming up in the new series but they added  that this could become an issue if the concerned law is not amended soon. 
 
The RBI has claimed to have written to the finance ministry about the need for amendment in 2017, but it is yet to hear from the government, the report said, citing a person with direct knowledge of the communications. The amendment is specifically needed for Section 28 of the Act, which reportedly deals with ‘recovery of notes lost, stolen, mutilated or imperfect.’ 
 
The RBI, which acknowledged that the new series of notes cannot be exchanged currently, responded to the newspaper as, “Due to change in size of Mahatma Gandhi (New) Series notes, mutilated/imperfect notes in MG (New) series could not be exchanged under the existing rules necessitating amendments to RBI (Note Refund) Rules, 2009.The mutilated/imperfect notes in the MG (New) series can be exchanged after notification of amendments in the official gazette.” 

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A senior finance ministry source reportedly said the government will look at making the necessary changes.