Check your cash. Pre 2005 currency notes will not work after 1st Jan 2015.The Reserve Bank of India announced that it would withdraw after March 31 all currency notes issued before 2005, including those having higher denominations of Rs 500 and Rs 1,000.
Later RBI extended the deadline for exchanging pre-2005 currency notes to 1 January 2015 from 1 July 2014 earlier.
"This withdrawal exercise is in conformity with the standard international practice of not having multiple series of notes in circulation at the same time. A majority of such notes have already been withdrawn through the banks and only a limited number of notes remain with the public," the RBI said in a press release without giving a reason for the deadline extension.
The RBI press release follows an "advisory" on 22 January in which the central bank said it will "completely withdraw" from circulation all bank notes issued prior to 2005 after 31 March 2014.
Customers were required to exchange these notes at banks from 1 April 2014 to 30 June 2014. From 1 July 2014, however, non-customers had to furnish proof of identity and residence to the bank branch in which they wanted to exchange the notes to change more than 10 pieces of Rs500 and Rs1,000 notes.
The RBI notification had led to speculation that the move was intended to flush out black money or fake notes from the banking system.
However in a clarification on 24 January, RBI said that "the rationale behind its move to withdraw bank notes printed prior to 2005 is to remove these bank notes from the market because they have fewer security features compared to bank notes printed after 2005."
"RBI has also advised banks to facilitate the exchange of these notes for full value and without causing any inconvenience whatsoever to the public. The Reserve Bank solicits the cooperation of the public in withdrawing these notes from circulation by exchanging them at a bank branch convenient to them," the central bank said.
"The Reserve Bank clarifies that the public can continue to freely use these notes for any transaction and can unhesitatingly receive these notes in payment, as all such notes continue to remain legal tender. The Reserve Bank will continue to monitor and review the process so that the public is not inconvenienced in any manner," it added.
So people transacting cash need to be careful.