ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

How to Deal With Mutilated and Soiled Banknotes?

Updated on May 4, 2020
PrateekJain24 profile image

Preteek Jain is a banking professional who has practical knowledge about the overall currency handling process.


Many people have a bad habit when handling currency notes. They usually write on the note or fold it. Sometimes, people will bind banknotes that will deteriorate and reduce their durability and longevity.

To eliminate such a scenario and increase the life of currency notes, RBI has introduced 'Clean Note Policy' in 2001. There are many people around us who aren't aware of such a policy. This should be followed in order to preserve the currency notes for a longer time.

Soiled and Mutilated Banknotes

Due to constant usage, the banknotes become soiled, dusty, and lose their actual colour. These types of notes are called soiled banknotes.

On the other hand, mutilated notes are those where a substantial part of the note is missing. They are assembled by joining several pieces, which together form an entire note. The two pieces that belong to the same note, pasted together to form a complete note, are called mutilated notes.


The main intention of introducing this policy was to make clean and good quality notes available to the public. In addition, they wanted to stop distributing damaged quality banknotes to the public. This policy is quoted as mandatory policy that banks must adhere to.


As per the policy, bundles of banknotes should not be tacked by stapler pins. They should be bound by polythene tape, paper, or rubber bands. In this way, the life of such packets will increase substantially.

First, banks need to sort paper money into two types i.e, issuable and non-issuable. Clear instructions are given by the government to all the banks that they should not give soiled notes over the counter. RBI advised citizens to avoid writing anything on the notes, and do not deteriorate notes by applying oil, and water on them.

All banks covered under article 35 (a) of the 'Banking Regulation Act' of 1949 have to comply with the Clean Note Policy. Otherwise, the license of the banks will be cancelled, or they will also be punished. Hence, banks should provide notes of good quality to the public in return to their spoiled or mutilated notes.

Technical Advancement

In order to eliminate bad quality banknotes, RBI has introduced automated machines. These machines has the ability to identify and sort several damaged banknotes at a time. The technology introduced for this purpose is called currency verification and processing system. Compare with manual verifying and sorting damaged banknotes practices, the machine has high accuracy and significant velocity in it.

The Reserve Bank of India has installed these machine in 42 centres of their currency issuance office. Also, many offices are furnished with this machine to detect soiled notes quickly.

Currency verification and processing systems have some unique features enabled in it to detects notes with unwanted writing or unusual watermarks. These types of notes are rejected automatically by the machine.

Awareness Among People

The embracing of this policy is made nationwide. There are still some people who don’t know about this policy and ruining the initiative. It is utmost important to take due care of our currency notes issued by RBI in order to run the economy smoothly. Those who spoil and damage notes quality, need to become aware of this policy. The harmful effects of damaged banknotes in the market will shrink economic growth. Whosoever will avoid following these measures will be punished by the court of law.


Clean note policy was constituted and conveyed in 2001. Still, it is not fully carried out in common practice. Earlier banks provide high-quality notes in return to old notes from customers by manual examination. But now banks are using technology to improve quality inspection of banknotes.

It is important to preserve the currency notes properly for the overall growth of the economy. The new currency note issuance process is very lengthy and costly. It's important to diminish new note issuance request very frequently. We should become aware of proper manners to handle the banknotes. Every person should abide by the proper process of handling currency notes. This will support our economy to rise and grow. Thank you for patiently reading. Please share your thoughts over the topic in the comment box.

This content is accurate and true to the best of the author’s knowledge and is not meant to substitute for formal and individualized advice from a qualified professional.

© 2020 Prateek Jain


This website uses cookies

As a user in the EEA, your approval is needed on a few things. To provide a better website experience, uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at:

Show Details
HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
LoginThis is necessary to sign in to the HubPages Service.
Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
AkismetThis is used to detect comment spam. (Privacy Policy)
HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the or domains, for performance and efficiency reasons. (Privacy Policy)
Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
MavenThis supports the Maven widget and search functionality. (Privacy Policy)
Google AdSenseThis is an ad network. (Privacy Policy)
Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
Index ExchangeThis is an ad network. (Privacy Policy)
SovrnThis is an ad network. (Privacy Policy)
Facebook AdsThis is an ad network. (Privacy Policy)
Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
AppNexusThis is an ad network. (Privacy Policy)
OpenxThis is an ad network. (Privacy Policy)
Rubicon ProjectThis is an ad network. (Privacy Policy)
TripleLiftThis is an ad network. (Privacy Policy)
Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)
ClickscoThis is a data management platform studying reader behavior (Privacy Policy)