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Money Feb 12, 2013

What to do when someone palms off a torn note to you

By Bindisha Sarang

Torn notes are not a problem when it comes to a game of monopoly. But in real life a torn note is bad news. There is a good possibility that someone might have palmed off a torn note to you, and you inadvertently accepted it.

Now you are stuck with it. You have four options to deal with this headache. One, palm it off to some unsuspecting victim. (After all someone fooled you, why not fool someone else? Cheap.) Second, you could probably push the note into a donation box of some religious place - don't be surprised, many do so. (Cheaper.) Third is to absorb the loss. Practical only if it is a Rs 5, 10, 20 or even 50. If it's a Rs 500 or Rs 1,000 note, you might not want to absorb the loss. And, fourth is approach your local bank branch and hope to get a fresh note.

Picture courtesy: RBI website

Picture courtesy: RBI website

Rules: The Reserve Bank of India has proper guidelines, namely note refund rules. Banks refund your torn note according to those rules. But, before you show your fist to the banker, keep in mind that getting a refund is not your right. From the RBI's part, it is just a gracious gesture.

Types: For you, it might look like a currency note gone bad, but from the banks' point of view, a bad note is further divided into various types. The type of note will determine your refund, if at all you are entitled for one. Here are a few types.

1) Soiled Note: A note is termed soiled when it becomes dirty due to normal wear and tear and also when two pieces are pasted together in such a way that both the pieces actually belong to the same note and form the entire note with no essential features missing.

Exchange Rules: Such notes can be exchanged for full value over the counter at any bank branch. And, as per the RBI's rule this type of note has to be accepted by the bank branch, even if you are not a customer of the bank.

2) Mutilated Notes: A mutilated notes is a note of which a portion is missing or which is composed of more than two pieces, the RBI says.

Exchange Rules:

5/10/20: For Rs 5/10/20 you get the full value back if the area of the single biggest undivided piece of the note presented is more than 50 percent of the area of the respective denomination.

Keep in mind, that if the biggest area (piece) is less than or 50 percent of the area of the note, you won't get any money.

50/100/500/1000: If your note is of Rs 50 denomination or above, you will get full value of the note if the area of the single biggest undivided piece is more than 65 percent of the area of the respective denomination.

But, if the biggest piece is between 40 percent and 65 percent of the area of the respective denomination, then you will get half the value of the note back.

And, if the biggest piece is less than 40 percent, then you won't get any value back and you will have to let go of the money.

3) Extremely brittle, burnt, charred, stuck-up notes: If you have such a note, you better be prepared to lose the money, reason being as per the RBI rules banks are permitted not to accept such notes for exchange.

These are just a few examples of the type of notes and how much exchange value you can get back. Next time you handle a currency note with care, after all someone might just lose money due to your mishandling of notes. Avoid stapling notes or writing on them. As far as the torn note you are still suck with goes, we just want to say, Good Luck!

by Bindisha Sarang

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