(Seychelles News Agency) - The Central Bank of Seychelles (CBS) is removing old 100 and 500 rupee banknotes from circulation to ensure that the country can take advantage of the improved security features of the newly introduced banknotes.

Mike Tirant, the head of banking services division at the CBS on Thursday said, “The 500 and 100 rupee notes are the first to go as they hold more value.” 

The first issue of the 100 rupee banknotes was in 1998 and since then it has been upgraded three times, in 2000, 2008 and 2011.

The 500 rupee note on the other hand was introduced in 2005 and was later upgraded in 2011. New notes in both denominations were introduced last December.

The banknotes are undergoing demonetisation, or the act of withdrawing the legal tender status of a currency by the issuing authority. Once complete, the currency is no longer accepted as a means of payment for goods and services.

Tirant said that 79 percent of the 500 rupee notes which had been in circulation have already been collected amounting to 623 million rupees ($46 million). For the 100 notes, 72 percent has been collected, totaling 150 million rupees ($11 million).

CBS said if all the notes are not collected, it increases the risks of fraudulent transactions.

The remaining 50, 25 and 10 rupee notes are not being withdrawn and they remain valid for transacting purposes.

The demonetisation takes effect on June 29, after which the Central Bank will be the only entity accepting the banknotes in exchange for the new ones.  

Members of the public therefore have until June 29 to use the notes or exchange them at their respective banks. For people who do not have a bank account, notes may be exchanged at the Central Bank, after proof of identity is shown.

Tirant explained that in the event that one has never had a bank account but has saved a substantial amount of money, they will have to fill up a form to declare where the money has been obtained.

Tourists can also exchange the old notes for new ones at the CBS.

“For individuals overseas who are in possession of these bank notes and needs to repatriate the funds, the CBS will divert them to their commercial banks if it is before June 29. After the deadline, these individuals will have to contact the central bank to initiate the process of exchange,” Tirant said.