In late 2025, the Reserve Bank of India (RBI) has issued clarifications and guidelines regarding the ₹500 currency note amid widespread rumors of its discontinuation or ban. As of December 2, 2025, the RBI and the Press Information Bureau (PIB) have firmly stated that the ₹500 note remains full legal tender with no phase-out, demonetization, or withdrawal planned. These updates address viral WhatsApp messages and social media claims falsely suggesting banks would stop dispensing ₹500 notes from ATMs after September 30, 2025, or that they would be invalid by March 2026. The goal? To curb panic, ensure smooth cash circulation, and combat counterfeit notes. This guide covers the facts, security features, exchange rules, and tips for users—based on official RBI notifications.
Background: Why the Confusion in 2025?
Rumors surged in July-November 2025, claiming “RBI orders banks to stop ₹500 notes from ATMs by September 30, targeting 75% ATMs by then and 90% by March 2026.” This stemmed from a genuine April 2025 RBI circular directing banks and White Label ATM Operators (WLAOs) to increase smaller denominations (₹100 and ₹200) in ATMs for better accessibility. However, it does not restrict ₹500 notes—they continue to be loaded and dispensed normally.
- Official Stance: RBI and PIB fact-checks confirm no ban. All genuine ₹500 notes (Mahatma Gandhi New Series) are valid indefinitely.
- Impact: The clarification maintains public trust, as ₹500 notes make up ~20% of currency in circulation, vital for daily transactions.
No new ₹500 notes were issued in 2025 (last in 2016 with Governor Shaktikanta Das’s signature), but existing ones are unaffected.
Key Guidelines: What RBI Says About ₹500 Notes
The RBI’s November 2025 advisory focuses on validity, handling, and anti-counterfeit measures. Here’s the breakdown:
Validity and Usage
- Legal Tender Status: All ₹500 notes are fully valid—no expiry or recall. Use them for payments, ATM withdrawals, or deposits without issues.
- ATM Dispensing: Banks must balance cassettes with ₹100/₹200 for small-value needs, but ₹500 remains available. No “stoppage” order.
- No Demonetization 2.0: Unlike 2016 (₹500 old series withdrawn), the current series is safe.
Exchange and Handling Rules
- Damaged/Torn Notes: Easily exchange soiled, torn, or mutilated ₹500 notes at any bank branch or RBI regional office. RBI’s 2025 guidelines simplify this—no minimum amount required.
- Counterfeit Detection: Report fakes to police/banks; RBI rewards informants (₹10,000-50,000 based on value).
Security Features of the ₹500 Note: How to Spot Genuine Ones
The Mahatma Gandhi (New) Series ₹500 note (introduced 2016) includes advanced anti-forgery elements. RBI’s 2025 awareness drive highlights these for public verification:
| Feature | Description | How to Check |
|---|---|---|
| Color & Size | Stone grey base; 66mm x 150mm size. | Matches other notes; geometric patterns visible. |
| Watermark | Mahatma Gandhi portrait and multi-directional line. | Hold to light—clear image. |
| Security Thread | 3mm windowed thread with “Bharat” (Hindi) and “500” demetalized. | Tilt note—thread shifts color (green to blue). |
| Intaglio Printing | Raised print on Gandhi portrait, “RBI,” “Bharat,” and “Rupaye.” | Feel the texture—raised lines. |
| Micro-Lettering | “RBI” and “Bharat” in ₹500 corner; “500” near Ashoka Pillar. | Use magnifying glass—tiny text. |
| See-Through Register | Floral design aligns when held to light. | Overlap front/back—perfect match. |
| Optically Variable Ink | “500” numeral changes color (green to blue) when tilted. | Tilt note—color shift visible. |
| For Visually Impaired | Tactile intaglio marks and large numerals. | Feel raised elements. |
| Back Design | Red Fort image with year of printing. | Matches official; no alterations. |
Pro Tip: Use RBI’s “Manipur” app or UV light for quick checks. Counterfeits often fail the tilt test or watermark.
How to Exchange or Deposit ₹500 Notes: Step-by-Step
- At Bank Branches: Visit any scheduled bank with notes. No ID needed for small amounts (<₹50,000); larger requires KYC.
- ATMs: Deposit via CDM (Cash Deposit Machines)—scan and count instantly.
- Post Offices: RBI-authorized for exchange.
- RBI Offices: For bulk/mutilated notes; forms available online.
- Digital Alternatives: Use UPI/Aadhaar Pay for seamless transactions.
2025 Update: RBI eased rules for soiled notes—up to 50% damage exchangeable at full value if identifiable.
Debunking Rumors: Common Misconceptions
| Rumor | Reality |
|---|---|
| ₹500 Notes Invalid After Sept 2025 | False—PIB/RBI debunked; full legal tender. |
| ATMs Only Dispense ₹100/₹200 | Misread circular—increases small notes, doesn’t eliminate ₹500. |
| New ₹500 Series Coming | No—current series continues; focus on awareness. |
| Bulk Deposits Restricted | No—follow standard KYC; no new limits. |
Why This Matters: RBI’s Broader 2025 Currency Strategy
The guidelines align with RBI’s push for a “cash-plus-digital” economy:
- Counterfeit Combat: ₹500 fakes dropped 20% in 2025 due to awareness.
- Small Value Access: Addresses change-making issues for vendors/transit.
- Digital Shift: Encourages UPI (transactions up 50% YoY), but cash remains king (₹33 lakh crore in circulation).
For updates, check RBI.org.in or PIB.gov.in. This isn’t financial advice—consult your bank for specifics. Got ₹500 notes? They’re good as gold—use freely!