1. Banknote
  2. Definition
  3. Process of Banknotes
  4. Soiled notes and Mutilated Notes
  5. Value of Soiled/mutilated banknotes


A banknote may be a negotiable certificate of indebtedness that one party will use to pay another party a selected quantity of cash. A banknote is collectible to the bearer on demand, and also the quantity collectible is obvious on the face of the note. Banknotes square measure thought-about legal tender; in conjunction with coins, they create up the bearer types of all trendy cash.


A Banknote, additionally known as folding money or bills, may be a sort of bearer certificate of indebtedness issued by a bank and collectible for the asking. Banknotes are tender and maybe want to settle any and every one debts.

Process of Banknotes

Notes are available in numerous forms and underneath numerous names supported the trade concerned. As an example, in accounting, a note is mentioned as a “note collectible.” These notes are common in most jurisdictions as monetary instruments and are used in the main by short-time funding firms.

Before trendy societies and monetary systems were established, folks used valuable objects, like gold and silver, to purchase merchandise and services through bartering. Eventually, folding money and coins replaced these physical assets as representative currency. Once this happened, precious metals backed the new currencies to grant them credibility.

At present, solely the govt. backs banknotes. Though in earlier times industrial banks might issue banknotes, the Fed Bank is currently the sole bank that will produce banknotes and mint cash. Worldwide, billions of economic transactions use banknotes daily.

Soiled notes and Mutilated Notes

Soiled notes: Soiled notes are those that became dirty and slightly cut. Notes that have numbers on 2 ends, i.e. notes within the denomination of Rs. 10 and on top of that are in 2 items, also are treated as a Solid note

Soiled notes square measure those notes –

  • Became dirty
  • Lightly cut

Soiled notes may be changed at –

  • Counters of public sector bank (PSB) branch
  • Currency chest branch of a non-public sector bank
  • Issue workplace of run

Note that, there ought not to fill any style of type to exchange Soiled Notes. Additionally note that the exchange is fully priced, which means you’ll get the entire quantity of the soiled note in exchange.

Mutilated Note: A mutilated note maybe a note of that some is missing or that consists of over 2 items. Mutilated notes could also be bestowed at any of the bank branches. The notes thus bestowed shall be accepted, changed, and adjudicated by the bank of Bharat (Note Refund) Rules, 2009

Mutilated notes are those notes –

  • In items (more than two)
  • Essential parts square measure missing. Essential parts square measure – the name of supplying authority, guarantee, promise clause, signature, Ashoka Pillar emblem/portrait of Gandhi, watermark

Mutilated notes square measure changed at an equivalent place represented on top of (for Soiled notes), while not filling any style of type. However, note that the exchange price may be fully or half, consistent with run (Note Refund) Rules. (Depending on the injury of the notes, you’ll get the value).

Also, there’s another exchange facility for mutilated notes, mentioned as Triple Lock Receptacle (TLR). (Put the mutilated notes during a TLR cowl in conjunction with details, and deposit it within the TLR box at run Issue workplace. quantity is going to be come back by means that of a draft or pay order).

Value of Soiled/mutilated banknotes

Soiled banknotes and mutilated banknotes square measure changed for full price.

  • For denominations of but Rs.50, the realm of the only largest undivided piece of the note bestowed is over 50% of various denominations, rounded off to future complete sq. cm.
  • For denominations of Rs 50 and on top of, the realm of the only largest undivided piece of the note bestowed is over 50% c of the realm of various denominations, rounded off to future complete sq. cm. If the undivided space of the only largest undivided piece of the note bestowed is adequate to or over 40% and fewer than or adequate to 80% of various denominations rounded off to future complete sq. cm, the worth of the note is collectible.
  • A mutilated banknote in denominations of Rs fifty and on top of, maybe changed for full price, if, denominations contain a note composed of 2 items of an equivalent note and also the 2 items, singly have a section} adequate to or over 40%  of the entire area of the note in this denomination.
  • Banknotes in denominations of Rs one, Rs 2, Rs 5, Rs ten, and Rs twenty, cannot be changed for half the value