It’s not uncommon to come across torn, soiled, or damaged currency notes in India. Maybe the note was in your pocket during laundry, or perhaps it got damaged while handling. Whatever the reason, most shopkeepers or vendors often refuse to accept such notes. But now, you don’t have to worry. The Reserve Bank of India (RBI) has issued clear and updated rules to help people exchange these damaged notes easily and legally.
In this article, we will explain everything in simple language—what is a mutilated note, how to exchange it, what the bank's responsibility is, and what to do if your request is denied. This is something every Indian must know.
What Is a Mutilated or Damaged Note?
According to the RBI, a mutilated note is one which is:
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Torn or cut
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Dirty or soiled
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Burnt or partially destroyed
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Has missing portions
Such notes are often rejected by people, but the good news is, RBI has made rules that allow you to exchange these notes at banks, without losing your money.
RBI’s Rule: Banks Must Accept Damaged Notes
The most important thing to know is:
If your damaged note fits RBI’s criteria, no bank can refuse to exchange it.
Every public and private bank in India has been directed by the RBI to follow the rules and help customers who come with torn or soiled notes.
How Many Notes Can You Exchange at One Time?
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You can exchange up to 20 mutilated notes in a single visit to the bank.
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The total value of those notes should not exceed ₹5,000.
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If the value is more than ₹5,000, then:
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The amount may be credited to your bank account, and
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You may need to take special permission from the bank manager.
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So, small note exchanges can be done quickly, but larger ones may require a few more steps.
Received a Torn Note from ATM? Here’s What You Should Do
Sometimes, you may get a damaged note from an ATM. Here’s how to deal with it:
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Go to the nearest branch of the bank that owns the ATM.
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Give a written complaint to the bank manager.
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Attach the ATM transaction slip as proof. If you don’t have the slip, show the SMS alert of the withdrawal.
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The bank is responsible for replacing the note without delay.
This is your right, and banks must act on such complaints immediately.
How Much Value Will You Get for a Torn Note?
The value you receive depends on the condition of the note and the area that remains undamaged. RBI has set specific guidelines for this.
Examples:
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₹2000 Note
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If 88 sq. cm or more of the note is intact: You get full value.
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If only 44 sq. cm is intact: You get half value.
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₹200 Note
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If 78 sq. cm is intact: You get full value.
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If only 39 sq. cm is intact: You get half value.
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This rule is based on the size of each note and how much of it can be clearly identified.
Conditions in Which Notes Will NOT Be Exchanged
Not all damaged notes are eligible for exchange. There are some strict conditions under which banks will not replace your note:
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If the note is intentionally torn or damaged.
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If it is burnt deliberately.
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If something offensive or illegal is written on it.
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If the note is so damaged that its authenticity cannot be verified.
Such notes are considered intentionally mutilated, and they must be submitted to RBI offices, not regular bank branches.
What If a Bank Refuses to Exchange Your Note?
If a bank refuses to follow RBI rules and doesn’t help you, you can take the following steps:
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Call or give a missed call to RBI helpline: 14440.
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Lodge a complaint through the RBI complaint management system on their official website.
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Submit a written complaint to the bank branch manager and keep a copy for records.
RBI takes customer complaints seriously and may take action against banks that do not follow its instructions.
Where Can You Exchange the Damaged Notes?
You can visit the following to exchange your notes:
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Any bank branch (public or private)
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RBI Issue Offices (for severely damaged or unrecognizable notes)
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Authorized currency chest branches (usually in larger cities)
You do not need to have an account in that bank to get the notes exchanged, if the total amount is under ₹5,000.
Do You Need ID or PAN to Exchange Notes?
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For exchanging notes worth ₹5,000 or less, no ID proof or PAN is needed.
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If the value is more than ₹5,000, then:
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The bank may ask for your PAN card or other identification.
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You may be asked to deposit the amount into your bank account instead of receiving cash.
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Tips to Avoid Issues with Damaged Notes
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Inspect cash carefully when accepting it, especially in crowded places.
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Do not fold or write on currency notes.
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Avoid stapling notes, which weakens the paper and causes tears.
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If a note gets damaged, don’t panic – just visit a bank and follow the rules.
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Keep your ATM transaction slip until you count and confirm the money.
Why These Guidelines Matter
Many people are unaware of their rights related to currency exchange. They throw away torn notes or accept the loss. But now that RBI has created a clear and fair system, no one needs to suffer due to a damaged note.
These rules are designed to:
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Protect common people from financial loss
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Prevent fake or fraudulent note circulation
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Improve public confidence in cash transactions
Summary of Key Points
| Situation | Action |
|---|---|
| You have up to 20 damaged notes worth ₹5,000 or less | Visit any bank, exchange directly |
| You have notes worth more than ₹5,000 | Ask the bank to deposit amount in your account |
| Damaged note came from ATM | Report to branch with slip or SMS |
| Bank refuses to exchange valid note | Call 14440 or file complaint on RBI website |
| Note is burnt or intentionally destroyed | Submit to RBI Issue Office |
Conclusion
Thanks to the Reserve Bank of India, there is now a proper system for exchanging torn or damaged notes. You no longer have to suffer losses or feel helpless if someone refuses to take a note. By knowing your rights and following the correct process, you can make sure that your money is never wasted.
So next time you come across a damaged note, don’t panic—remember the RBI rules, visit your bank, and get it replaced.
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