The Reserve Bank of India (RBI) has issued important new guidelines for the exchange of ₹100, ₹200 and ₹500 rupees notes that are torn, soiled, or mutilated. This update aims to standardize the process nationwide and ensure no citizen is left stranded with damaged currency. If you’ve ever received a torn note from an ATM or worried about soiled cash, here’s everything you need to know under the latest rules.
Key Announcement: Banks Cannot Refuse Exchange of ₹100, ₹200 and ₹500 Rupees Notes
A major relief for the public—RBI has directed all banks to accept damaged ₹100, ₹200 and ₹500 rupees notes for exchange. No bank can refuse, and you don’t even need an account with that bank to get your notes replaced.
According to Prashant Joshi, MD and Head of Consumer Banking Group at DBS Bank India, “Any individual can walk into any bank branch on a working day to exchange soiled or torn notes—no bank account is required.”
What Qualifies as a Mutilated Note?
As per banking officials, a note is considered “mutilated” if:
- A portion of the note is missing, or
- It is torn into more than two pieces.
Updated Refund Rules for ₹100, ₹200 and ₹500 Rupees Notes
The refund value depends on the remaining area of the damaged note. Below is a clear breakdown:
For ₹100 Notes
- Original Area: ~ 66 sq. cm
- Full Refund: If area ≥ 53 sq. cm
- Half Refund: If area ≥ 26.5 sq. cm but < 53 sq. cm
For ₹200 Notes
- Original Area: ~ 72 sq. cm
- Full Refund: If area ≥ 57.6 sq. cm
- Half Refund: If area ≥ 28.8 sq. cm but < 57.6 sq. cm
For ₹500 Rupees Notes
- Original Area: 99 sq. cm
- Full Refund: If area ≥ 80 sq. cm
- Half Refund: If area ≥ 40 sq. cm but < 80 sq. cm
For Small Denomination Notes (Below ₹50)
- Full value if 50% or less of the note is damaged.
- No value if more than 50% is missing.
Why This Update Matters Now
This clarification comes amid increasing instances of unfit ₹100, ₹200 and ₹500 rupees notes circulating in ATMs and daily transactions. The guidelines empower customers, reduce disputes, and ensure uniformity across banks.
Additionally, with recent speculation around the possible phase-out of the ₹500 rupees note, these rules help maintain trust in existing currency until any formal transition.
Step-by-Step Process to Exchange Damaged Notes
- Collect all soiled, torn, or mutilated ₹100, ₹200 and ₹500 rupees notes.
- Visit the nearest bank branch on a working day.
- Submit notes for examination—bank staff will measure the remaining area.
- Receive cash refund—full, half, or none—based on RBI criteria.
- Request a receipt if partial value is granted, for your records.
Connecting the Dots: Clean Note Policy & Digital Shift
These guidelines reinforce RBI’s Clean Note Policy, aimed at ensuring only fit currency remains in circulation. While the push for digital payments grows, clear rules for ₹100, ₹200 and ₹500 rupees notes remain essential for millions who rely on cash daily.
For official updates, always refer to the RBI website or notifications from the Ministry of Finance.