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Monday, May 13, 2024

Are Banknotes With Star Symbol (*) Legal Or Not? RBI Clarifies Amid Rising Confusion

Have you recently come across social media posts that claim banknotes with the star symbol (*) are illegal? If yes, then stop believing such viral posts, as the RBI itself has clarified.

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RBI clarifies the star symbol (*) on banknotes

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“It has come to the notice of the Reserve Bank that the validity of banknotes with a Star (*) symbol present on the number panel has recently been the subject of discussions on some social media platforms”, the RBI said in a press release yesterday.

India’s central bank, the RBI, said that in this connection, it is informed that the star (*) symbol is inserted in the number panel of a banknote that is used as a replacement for defectively printed banknotes in a packet of 100 pieces of serially numbered banknotes. A banknote with a Star (*) symbol is identical to any other legal banknote, except that in the number panel, a Star (*) symbol is added between the prefix and the serial number. The Star (*) symbol is an identifier that it is a replaced or reprinted banknote.  

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What is a “star series” banknote?

Fresh banknotes issued by the RBI until August 2006 were serially numbered. Each of these banknotes bears a distinctive serial number along with a prefix consisting of numerals and letters. The banknotes are issued in packets containing 100 pieces.

As per RBI, it adopted the “STAR series” numbering system for the replacement of defectively printed banknotes in a packet of 100 pieces of serially numbered banknotes. The Star series banknotes are exactly similar to the other banknotes but have an additional character, viz., a *(star) in the number panel in the space between the prefix.

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Also Read: RBI Governor Denies Rumours Of Bringing Back Rs 1,000 Notes

Who decides on the figure to be printed on a new banknote?

As per RBI FAQs, in terms of Section 25 of the RBI Act, the design, form, and material of bank notes shall be such as may be approved by the Central Government after consideration of the recommendations made by the Central Board.

Some more FAQs on banknotes answered by the RBI

How many languages appear in the language panel of Indian banknotes?

15 languages are appearing in the language panel of banknotes in addition to Hindi prominently displayed in the centre of the note and English on the reverse of the banknote.

Is it possible to have two or more banknotes with the same serial number?

Yes, it is possible to have two or more banknotes with the same serial number, but they would either have a different Inset letter, a different year of printing, or the signature of a different Governor of the RBI. An Inset Letter is an alphabet printed on the Number Panel of the banknote. There can be notes without any inset letters as well.

What is non-sequential numbering?

Are Banknotes With Star Symbol (*) Legal? Reserve Bank Of India Clarifies Amid Rising Confusion
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With a view to enhancing operational efficiency and cost effectiveness in banknote printing, non-sequential numbering was introduced in 2011 in accordance with international best practises. Packets of banknotes with non-sequential numbering contain 100 notes that are not sequentially numbered.

Also Read: How RBI Creates & Distributes Indian Rupee Banknotes

Who decides on the volume and value of banknotes to be printed, and on what basis?

The volume and value of banknotes to be printed in a year depend on various factors, such as (i) the expected increase in Notes in Circulation (NIC) to meet the growing needs of the public and (ii) the need for replacing soiled or mutilated notes so as to ensure that only good-quality notes are in circulation. The expected increase in NIC is estimated using statistical models that consider macro-economic factors such as expected growth in GDP, inflation, interest rates, growth in non-cash modes of payment, etc. The replacement requirement depends on the volume of notes already in circulation and the average life of banknotes.

RBI estimates the volume and value of notes to be printed in a year based on the above factors as well as feedback received from its own Regional Offices and banks regarding expected demand for cash and finalises the same in consultation with the Government of India and the printing presses.

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