"It is not intended to get at blackmoney, tax evasion etc. I am not saying those are good things. This is technical action, in order to withdraw notes which have fewer security features than new notes," Rajan said in a media briefing after announcement of third quarter monetary policy review.

It is an attempt to reduce the possibility of counterfeiting and give more reliable notes at the hands of the public, he said.

"Of course we want to minimize any inconvenience (to the) public...so this process (of withdrawal) would be much smooth. This particular currency withdrawal is meant at something else," he added.

Last week RBI had said that after March 31, 2014, it will completely withdraw from circulation all bank notes issued prior to 2005. From April 1, 2014, the public will be required to approach banks for exchanging these notes.

The RBI had also said the volume of such notes that were being withdrawn from circulation was not significant.

On whether the counterfeiter will now see new means, Rajan said, "The whole point about the security feature is that they are hard to counterfeit. We have no doubt we are in a constant race, we have to keep improving the security features and counterfeiters keeps trying to figure out how to do that."

Notes will continue to be withdrawn, he said, adding, it is a part of a technical process which will continue in the future also.

"I have no doubt today's note will be withdrawn at some point. Many of them are destroyed in the process of use itself. We have clean note policy, if anything is written on note we take it out of circulation," he said.

(Agencies)

Latest News from Business News Desk