Section 28A of RBI Act : Section 28A: Issue Of Special Bank Notes And Special One Rupee Notes In Certain Cases

Explanation using Example

Imagine a scenario where the Reserve Bank of India (RBI) decides to issue a series of special bank notes specifically designed for use by Indian citizens traveling abroad. These notes, in denominations of ₹5, ₹10, and ₹100, are distinct in design from the regular currency to easily differentiate them and to control their circulation outside of India.

In this hypothetical situation, the Central Government, after considering the RBI Governor's recommendations, approves a unique design and material for these special bank notes. However, these notes are not legal tender within India itself, meaning they cannot be used for transactions within the country.

Let's say an Indian traveler, Mr. Sharma, is planning a trip to Europe. Before his departure, he visits a designated RBI office to exchange his regular currency for these special bank notes. The RBI, following regulations set with the approval of the Central Government, allows Mr. Sharma to obtain the special currency which he can use in certain transactions while abroad, perhaps at Indian embassies or specific overseas merchants that accept them.

Upon returning to India, Mr. Sharma goes back to the RBI office to exchange any remaining special bank notes for regular currency, as they are not valid for use within India. This system helps the RBI monitor and control the flow of Indian currency outside the country.