Have you been through cash damage, like for instance you went to your bank ATM machine and received a torn currency note, or someone passed onto you a soiled or mutilated bank note. It must be frustrating to have a such a note in your hand, because exchanging it or buying groceries or travel or any other form of money activity becomes difficult. It's like you are stuck with that particular note and there is no way to exchange it. In desperation, sometimes you slip it to someone deviously or even make an attempt to pass it onto someone else, just because you are tired of it! As an individual it is very important to know the difference between which notes can be exchanged with banks, and surely, to your surprise, RBI allows torn, soiled or mutilated banknotes to be taken care of at your respective bank branch. There are a host of guidelines provided by RBI which help you get rid of these notes, all you have to do is go to your bank branch. In India, there are banknotes namely Rs 10, new Rs 10, Rs 20, Rs 50, new Rs 50, Rs 100, new Rs 100, Rs 200, Rs 500 and Rs 2,000, that have the possibility to be in some ways damaged. As a citizen it is your duty to make sure you get these banknotes back to branches if they are torn, mutilated or soiled rather than passing it on to someone else and letting the process continue. You are held responsible in this process then!
The largest private lender HDFC Bank on its website mentions that, the bank accepts mutilated / soiled notes from customers / non customers for exchange. Process of acceptance of such notes has been defined as per RBI's note refund rules and circulated to all the branches for adherence.
HDFC Bank adds, all branches of the Bank offer the facility of exchange of soiled notes, exchange of mutilated and cut notes, exchange of coins including uncurrent coins into notes or coins. The process of exchange would be as per RBI's Note Refund Rules.
Similar guidelines are given by many banks, because RBI demands the lenders to look into the matter and help citizen get rid of damaged banknotes.
What is soiled, mutilated banknotes?
The soiled notes are those. which have become dirty due to usage and sometimes also involve two piece note pasted together - which means two pieces of belonging to a same note are stuck together to form an entire note.
In case of mutilated banknotes, a portion of the currency may be missing or it is in two pieces.
RBI does not allow any claim in respect to currency which is alleged to have been stolen, lost or wholly destroyed. However, the central bank does allow a claim for mutilated or soiled notes but after the currency meets a certain criteria.
RBI makes sure to check where a note has been made imperfect or mutilated, thereby causing the note to appear to be of a higher denomination, or has been deliberately cut, torn, defaced, altered or dealt with in any other manner, not necessarily by the claimants, enabling the use of the same for making of a false claim under these rules or otherwise to defraud the Bank or the public.
Hence, it is very important to understand which mutilated notes can be exchanged at the banks, as per RBI.
The adjudication of claims in respect of notes of less than fifty rupees denomination shall be made in the following manner, namely.
If an area of the single largest undivided piece of the note presented is more than 50% of the area of the respective denomination, rounded off to the next complete square centimeter, full value on mutilated notes of the above denominations shall be payable.
However, if the small denomination notes is less than or equal to 50% of the area, then they will be rejected by banks.