New notes of Rs 2000, Rs 500 issued post demonetisation are fast becoming unusable after due to the poor quality as compared to the old notes, as per reports.
The currency if becomes unusable then it can't be used in banks as the sensors inside the ATM machine won't detect them, and if the reports about the poor quality of the notes are to be believed then, not only the Rs 2000 or Rs 500 notes but Rs 10 notes issued in this year are also becoming unusable.
It's worth mentioning that the government while introducing the notes had said that the new notes have higher security features that will put an end to counterfeiting.
The reports have quoted a senior official in the banking division of the Finance Ministry saying that the new notes are becoming unusable as people generally keep them folded or tie with saree or Dhoti. NewsX cannot independently verify the claims of the quoted official. Meanwhile, the government has denied the reports saying there was no compromise with the quality of notes.
It's a Banking practice to put notes under 'non-issuable' category when the currency can't be used in ATMs or exchanged by the public. These notes are soiled or teared and are sent back to the RBI who takes it out of circulation.
Earlier, RBI had banned the new notes issued post demonetisation to be tagged as unusable, however, in July 2018 owning to the pressure of commercial banks, RBI relaxed the norms in July.
Prime Minister Narendra Modi on November 8, 2016, in a surprise move, had announced demonetisation of Rs 500 and Rs 1000 notes. The opposition had since then attacked the PM's decision for poor implementation of the scheme. PM Modi had called the exercise a surgical strike on black money but later introduction of higher denomination note and changed the stance of govt over the exercise, only invited criticism.
The Reserve Bank of India in August 2017, released its report stating that 99% of the banned notes made it back into the system.