Business

India withdraws old currency notes in 'black money' move

  • 23 January 2014
  • From the section Business
India notes being counted
Undeclared cash is seen a major hurdle to India's economic growth

The Reserve Bank of India (RBI), the country's central bank, says it will withdraw all currency notes printed prior to 2005 from 31 March.

The move is being seen as an attempt to curb the circulation of "black money" - cash that has not been declared or taxed.

According to some estimates, India's underground economy accounts for 50% of its gross domestic product (GDP).

The RBI said consumers will be able to exchange old notes at retail banks.

The bank added that the notes issued before 2005 "will continue to be legal tender".

"This would mean that banks are required to exchange the notes for their customers as well as for non-customers," it said in a statement.

However, it said that after 1 July anyone who is not a bank's existing customer will have to furnish proof of identity and residence if they are looking to change more than 10 notes of 500 and 1,000 rupees denomination.

The central bank said that notes issued prior to 2005 can be indentified easily as they do not have the year of printing marked on them.

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