All of us face soiled and damaged bank notes floating around in the market. But we all try to avoid these but what if we do encounter one?? No need to fightwith your “Sabzi wala bhaiya” over it. There are some Norms set up by RBI to recycle the old notes with fresh ones.

There are Two categories defined for damaged currency notes as follows:

  1. Soiled Notes: These are notes those get dirty due to common usage and are acceptable at every financial institution.These also include two pieces joined together with clear tape, but the security features are intact like unique number



  1. Mutilated Notes: The notes that have been torn to pieces or a part of them exists.
















the note in above photo is mutilated with probably more than 50% of the area.but I won’t get a full refund!! because a key element the NUMBER is MISSING

so according to condition of the notes we define the value that they fetch on being presented at exchange counter of an authorised Bank or at RBI’s branch.

  1. Full value :
    i) For all soiled notes
    ii) For denominations of rupees 1,2,5,10,20, if the single largest piece presented is more than 50% of the area of respective note If the area of the largest undivided piece of the note presented is less than or equal to 50 percent of the area of the note, No Claim will be given

iii) For denominations above than these, an area requirement more than 80% is required.

  1. Half Value if the undivided area of the single largest undivided piece of the note presented is equal to or more than 40 percent and less than or equal to 80 percent of the area of the respective denomination rounded off to the next complete square centimeter, half the value of the note is payable.

If the area of the single largest undivided piece of the note is less than 40 percent, no value shall be payable, and the claim shall be rejected.

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