The new currency notes claiming with higher ‘security’ features introduced after demonetisation, two years ago in 2016, are quickly becoming ‘unusable’ within just two years of circulation.
This was reportedly due to the poor quality of the paper used for printing these notes, in comparison with the earlier notes which used to be in circulation for years. If the currency becomes unusable, it can’t be used in ATMs as the sensors inside the ATMs can’t detect the bad quality notes.
According to a news report in `Amar Ujala’, the problem is so intense that apart from the Rs 2,000 and Rs 500 notes, even the new Rs 10 notes, which were issued in 2018, are also becoming ‘unusable’. The report alleged that the banks have started categorisation of these notes under ‘non-issuable’ category.
In fact, earlier, the RBI had banned banks from categorising new notes under non-issuable category, but after pressure from commercial banks, the central bank relaxed the rule on July 2, 2018.
Banks categorise notes under ‘non-issuable’ category when the currency can’t be used in ATMs, or be accepted, exchanged by the public. Soiled, torn and dirty notes are classified as ‘non-issuable’ and are sent back to the Reserve Bank.
According to the circular, “The RBI, with a view to mitigating the hardship to the public in genuine cases, it has been provided that the RBI may, with the previous sanction of the Central Government, prescribe the circumstances in, and the conditions and limitations subject to which, the value of such currency notes or banknotes may be refunded as a matter of grace.”