Here is how you can claim a full refund of a 'Mutilated Currency Note'

The Reserve Bank of India (RBI) has detailed rules that lay down conditions for exchange of mutilated notes. One can get a full or half refund of the value of the mutilated note based on the condition of the note. Here is a detailed guide of the rules.

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Most of us have mutilated currency notes which cannot be used for transactions since businesses wouldn’t accept mutilated notes. The Reserve Bank of India (RBI) has detailed rules in this regard that lay down conditions for exchange of such mutilated notes. One can get a full or half refund of the value of the mutilated note based on the condition of the note. Here is a detailed guide of the rules.

What type of notes will be accepted?
As per Reserve Bank of India (Note Refund) Rules, 2009, the following type of notes will be considered for refund.

Imperfect note: means any note, which is wholly or partially, obliterated, shrunk, washed, altered or indecipherable but does not include a mutilated note.
Mutilated note: means a note of which a portion is missing or which is composed of more than two pieces.
Mismatched note: means a mutilated note which has been formed by joining a half note of any one note to a half note of another note. A mismatched note can be identified on the basis of number, signature etc. and after examining other security features.

No refund claim shall be accepted in the case of notes where it

Cannot be identified with certainty as a genuine note
Has been made imperfect or mutilated, thereby causing the note to appear to be of a higher denomination or has been deliberately cut, torn, defaced, altered or dealt with in any other manner, enabling the use of the same for making of a false claim
Carries any extrinsic words or visible representations intended to convey or capable of conveying any message of a political or religious character or furthering the interest of any person or entity
Has been imported into India from any place outside India in contravention of the provision of any law
Any information called for by the prescribed officer is not furnished by a claimant within a period of three months from the date of receipt of the notice or letter asking for the information.

What is the process of refund?
Such notes will be accepted only at the issue offices of RBI and at all the currency chest branches of various banks. The list of currency chest branches of various banks can be accessed from the RBI website. In all these branches, the mutilated notes will be accepted over the counter and a paper token in form DN-1 will be issued to the person submitting the notes. The refund value & criteria is different for different denominations.

For Currency notes of denomination less than Rs 50: In the case of currency notes of less than Rs 50 denomination, full refund will be made only if the area of the single largest undivided piece of the note presented is more than 50% of the area of the respective denomination, rounded off to the next complete square centimetre. If the area of the largest undivided piece of the note presented is less than or equal to 50% of the area of the note, the claim will be rejected and no refund is made. The detailed denomination wise size of the note and the area required for full refund is defined in the rules and the relevant table is given below.

For Currency notes of denomination more than Rs 50: In the case of notes of higher denomination (Rs 50 & above), there are multiple criteria as listed below. The RBI has recently amended the rules to increase the area of the undivided piece required for full refund from more than 65% to more than 80%.

Full refund will be made if the area of the single largest undivided piece of the note presented is more than 80% of the area of the respective denomination rounded off to the next complete square centimeter.
Half the value will be refunded if the undivided area of the single largest undivided piece of the note presented is equal to or more than 40% and less than or equal to 80% of the area of the respective denomination rounded off to the next complete square centimeter.
No refund will be made if the area of the single largest undivided piece of the note is less than 40%.
If the claim of mutilated notes of Rs 50 and above denominations consist of a note composed of two pieces of the same note and the two pieces, individually have an area equal to or more than 40% of the total area of the note in that denomination, then a full refund will be made.

The dimensions of the new notes and the respective area required for full & half refund are given in the table below.

What about Mismatched & Imperfect notes?
The value of an imperfect note will be refunded in full or half value based on the dimensions mentioned in the tables above only if

the matter, which is printed on the note has not become totally illegible , and
the prescribed officer is satisfied that it is a genuine note

In the case of a mismatched note and denomination of up to Rs 20, the area of the larger of the two pieces presented may be measured and adjudicated as per the tables above ignoring the smaller piece. If none of the two pieces presented meets the minimum area stipulated, then no refund will be made. In case of Rs 50 and above denominations, the two pieces may be treated as two separate claims and the area is calculated accordingly.

When will the refund be made?
As per the rules, the process is to be completed in minimum possible time and in any case on the same day. In addition, the value of such notes should be credited to the account through ECS or paid by way of Banker Cheque or Demand Drafts.

The prescribed officer in charge of verifying such mutilated notes should be equipped with the following

Table lamp of medium intensity
Magnifying glass
Measuring centimeter plate (in plastic)
A set of genuine notes in all denominations of different patterns

The message ‘Mutilated notes are accepted and exchanged here’ should be prominently displayed outside the bank. Inside the banking hall and above the counter where mutilated notes will be accepted, the following board should be displayed.

Mutilated notes are accepted here for exchange under Reserve Bank of India (Note Refund) Rules
Exchange value, if any, must be collected on the same day
Notes on which exchange value is not payable will be retained by us
In case of difficulty, please see Branch Manager.

What about Soiled notes?
In the case of soiled notes, all bank branches should accept such notes and pay full value.