How to Submit Damaged Money for Reimbursement

Introduction

According to RBI regulation, three major types of currency notes are eligible for reimbursement. The first category is defective notes, which include any bank note that has been exchanged so many times that the print is no longer legible.

The second category is mutilated notes, which are currency notes that have fallen apart, torn apart, or reassembled from fragmented pieces. The final category is mismatched notes. In the unlikely event that one receives a note of two mismatched parts adhered together, they can still have it exchanged.

Reimbursement Process

To claim Reimbursement, one has to follow these three steps:

1. Collect - Collect as much banknote material as possible without inflicting additional damage to the banknotes. This will allow the Reserve Bank to determine the value of the envelope or claim accurately.
2. Package: Place the bills in an envelope or sealable bag. Claims for tainted banknotes must be packed in a bag and labeled with the contamination facts on the exterior.
3. Submit - Bring the bills to your local ADI, who can help us make Details about any claim. Details about any contamination must also be provided on the form.

It is advised by the Reserve Bank that holders of damaged banknotes turn them into their bank or other financial institution. The Reserve Bank encourages these institutions to consider all claims. The Reserve Bank may give grids for estimating the value of incomplete banknotes; however, they determine the banknote's evaluated value, which may differ from the estimate derived from the grids.

Banknotes that are severely damaged or tainted must be sent to the Reserve Bank's National Banknote Site (NBS) for evaluation. On behalf of the claimant, banks and other financial institutions see to it that the claim is safely transferred to the NBS.

Banks and other financial institutions should avoid sending claims through the mail and instead use their existing relationships with Cash-in-Transit (CIT) providers to submit claims to the Reserve Bank. Claims sent through mail are posted at the sender's expense and risk. The Reserve Bank bears no responsibility for claims sent through mail or until they are handed to the NBS.

Identification Specifications

The Reserve Bank confirms the legitimacy of clients who submit claims worth $1,000 or more. Therefore, unless the claimant has already filled out an Identification form about another claim and the information hasn't changed, such claims must be supported by the necessary identification papers and the Identification Reference Form.

In general, banks only give people their money back in full if they still possess at least half of a damaged banknote. Most claims are typically evaluated in a month, though some may take longer because of postal worker strikes. Applications that are approved are refunded electronically. The bank refuses to accept notes that have become very brittle, are severely burned, scorched, or are irreversibly fused, and cannot sustain regular handling. Nonetheless, these notes are exchangeable at RBI issuing offices.

Additional Circumstances

The exchange of notes is subject to restrictions and requirements. A bank may also refuse or charge for the facility under specific circumstances. Banks have to exchange notes for free if there are up to 20 pieces and a daily maximum value of ₹5,000. Nonetheless, banks may accept them upon receipt for value to be credited later if the amount is greater than 20 pieces or ₹5,000 in a single day. In certain situations, a service fee might also be assessed.

Any note with a political statement is no longer legal tender, and any claim based on it will be refused, notes that are deformed may be discarded. Notes found to be purposefully cut, torn, changed, or tampered with may also be refused for exchange. So we have to remember these guidelines if we have to swap filthy notes.

Exchange Procedure

The "Damaged Cash Claim Form," which is accessible at the bank counter, must be completed and submitted with the damaged cash if one wishes to exchange it. To ascertain if the damaged currency satisfies the requirements for exchange outlined in section 4, the Bank will inquire as to how the cash was damaged and whether the individual has any remaining missing pieces.

After receiving the "Damaged Cash Claim Form" and the damaged cash, the Bank issues a numbered tag. The numbered tag must be kept by the consumer to obtain the exchange value.

Using the specified exchange criteria, the Bank will ascertain the exchange value of the damaged cash. The Bank shall handle the damaged cash in line with the section 8 examination procedure if it becomes imperative to verify its legitimacy.

The Bank uses the bare minimum of coins and/or banknotes to pay the exchange value in cash. To get the exchange value, one must present the numbered tag to the counter together with their name. Once they receive the exchange value from the bank, it is crucial to verify its quantity.

Verification of the Authenticity of Cash

The "Examination Application Form" that is available at the bank's counter needs to be filled and submitted with the cash if you believe the cash is fake or has been altered. The bank will then examine the authenticity of the cash.

The Bank may question the client about the source of the funds, among other things.

If the currency is damaged or difficult to use, the Bank will, upon request, replace it with new currency. It must be exchanged by submitting the "Damaged Cash Claim Form."

Any cash that does not satisfy the requirement will be returned by the Bank. The Bank will return the money to its owner if it is determined that it is counterfeit or changed. Even if individuals are not clients of that particular bank, customers can stroll into any branch to exchange their damaged notes. To request a refund, they can also get in touch with RBI directly through one of its regional offices.

If a customer wishes to swap more than twenty notes or notes valued at ₹5,000 or more, the cashier will accept them in exchange for a receipt and credit the amount within thirty days if the bank is unable to provide a refund right away. In this instance, they have the option to impose a service fee for the exchange.

A bank branch may direct us to a chest bank if the sum is more than ₹ 5,000. These are the branches that the RBI has permitted to stock and provide coins and banknotes to nearby branches. Users can deposit damaged notes into a savings bank account or use them to pay taxes and utility payments; they don't put these notes back in use. Even the newly issued notes that were issued following the demonetization are gradually wearing out. One can rescue the value of all those frayed and stained notes with a little extra work.

If a currency note is damaged, a complete refund will only be issued if the area of the greatest intact portion of the damaged note is larger than 80% of the entire area of an undamaged note. Users will only be paid half the note value if the largest piece occupies more than 40% of the space but less than 80%. They won't receive any reimbursement at all if the largest component makes up less than 40% of the total area.

When parts of two separate notes are adhered to each other, the criteria are somewhat different for mismatched notes; the greater piece's Note will be taken into account in these situations. The two pieces may be handled as two different notes for mismatched notes of ₹ 50 or more, and the amount of the refund will depend on the dimensions of each piece.