Torn and Soiled Currency Notes? Know What to Do with Them
May 04 , 2013

All of us have had times when the rickshaw driver or grocery store guy tucked a terribly soiled note into our hand. It was too late by the time you realized. Small denominations, no worry, you'd pass it on to others on priority. Bigger denominations could pose a problem, because everyone seems to scrutinize them before accepting.

But you exchange them for good notes without hassles, depending on how bad they are. Bad notes are accepted by RBI and it has issued directions to all bank branches to accept bad notes from any customer and return good notes in exchange.

Type of bad notes

Though to us it's all the same- torn notes, the RBI treats them differently.

Soiled or cut notes

If the notes are dirty and slightly cut they are soiled notes. Or the currency note could be cut in two pieces and pasted to form an entire note. All bank branches would freely exchange such notes at any time. They are accepted for payment at banks. Banks cannot reissue them to public instead they are deposited in chests for passing on to the RBI.

Mutilated notes

These notes are those which are cut into more than two pieces or essential features are missing. Essential features in a currency note are issuing authority, guarantee, promise clause, signature, Ashoka Pillar emblem/portrait of Mahatma Gandhi and water mark. Exchange rules for mutilated notes are somewhat complicated and are as follows.

  • For notes of denominations up to Rs 20:

If area of the biggest undivided piece is 50% or more of the note you get full value.

  • For notes of denominations of Rs 50 or higher:

If area of the biggest undivided piece is 65% or more of the note you get full value. If there are two pieces of area 40% each you can still get full value of the note.

If area of the biggest undivided piece is more than 40% of the note but less than 65% you get half value.

If area of the biggest undivided piece is less than 40% of the note no value would be returned.

If your notes are torn into too many small pieces you would have to return them at RBI Issue Office.

Brittle, burnt, charred, stuck up notes

Notes that are extremely brittle, badly burnt or charred, stuck up inseparably will not be accepted at bank branches. Though there are less chances these could have accidentally landed with you if you have them your only chance is to tender them at RBI Issue Office for adjudication.

Tendering to RBI directly

You also have the option of giving the torn/mutilated notes back to RBI. You can put them in Triple Lock Receptacle (TLR) covers and send them to RBI Issue Offices at one of its 19 locations. The value of such notes will be remitted to your bank account or address later.

Things to remember

Notes with political message or political slogan are not accepted as currency. They will not be exchanged. Similarly if notes are deliberately cut they will not be exchanged. Thought it is difficult to tell exactly if a cut is deliberate or not they might reject especially if a large number of such notes are produced and there are patterns in missing portions, shape of cut etc. Some have the habit of stapling together notes or writing on them. These should be avoided since they lead to soiling over time.

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