There is a strong demand from various quarters to ban denominations of 500 and 1000 to curb black money by making easy hoarding of money difficult. Reserve Bank of India had taken a partial measure in that direction. RBI has announced that after March 31, 2014, it will completely withdraw from circulation all 500 and 1000 notes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes. The currency notes issued before 2005 will not have the year of printing on reverse side.
However, the notes continue to be legal and can be exchanged in banks from April 1st. However, banks will make it mandatory to submit identity proof and residence proof to exchange such notes more than 10 in number. This measure will also help preventing fake currency as notes released after 2005 have certain security measures making it difficult to fake currency.
