Banks gear up for pre-2005 note exchange rush

New Delhi/Mumbai: Banks are gearing up tomeet the expected customer rush for exchanging currenciesafter the Reserve Bank’s decision to phase out notes issuedprior to 2005.

“There will be some pressure, but we are confident that wewill handle it. We have cash depositing machines in largenumbers which will help ease pressure. By end of February,we will around have 1,000 cash depositing machines,” StateBank of India Deputy Managing Director P K Malhotra told PTI.

[caption id=“attachment_1310507” align=“alignleft” width=“380”]  Representational Image. Reuters[/caption]

This is a good initiative as it will help remove fakecurrency which are in circulation, he said, adding that noteswhich are printed after 2005 have more security features.

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According to Oriental Bank of Commerce CMD S L Bansal, thebank will adhere to all the directions of the Reserve Bank ofIndia (RBI) regarding withdrawal of notes.

“I don’t feel there would be a great rush for exchange ofnotes because most of such currency would be out of system,“he said, adding that generally notes have shelf life of 10years only.

A senior official of Punjab National Bank said theirbranches are fully geared up to meet the rush for currencyexchange.

The Reserve Bank on January 22 decided to withdraw allcurrency notes issued prior to 2005, including Rs 500 and Rs1,000 denominations, after March 31 in a move apparently aimedat curbing black money and fake currencies.The public are required to approach banks for exchangingthese notes.

The RBI had also said the volume of such notes that werebeing withdrawn from circulation was not significant.

The removal of older currency notes from circulation is astandard international practice, RBI had said.

From July 1, 2014, persons seeking exchange of more than10 pieces of Rs 500 and Rs 1,000 notes will have to furnishproof of identity and residence to the bank.

The notes printed prior to 2005 will continue to be legaltender even after July 1. Any number of these old seriesnotes can be exchanged by people at bank branches where theyhave accounts, RBI had said.

As per RBI data, 7,351 crore pieces of currency notes werein circulation on March 31, 2013. Of this, 14.6 per cent wereRs 500 notes and 5.9 per cent were Rs 1,000 notes.

PTI