The Legal Tender (Inscribed Notes) Act, 1964
Administered Ministry: Ministry of Finance / Department of Economic Affairs
Act details
| Short title | The Legal Tender (Inscribed Notes) Act, 1964 |
|---|---|
| Long title | An Act to restrict the negotiability of currency and other notes inscribed with messages of a political character. |
| Act number | 28 of 1964 |
| Act year | 1964 |
| Enactment date | 30 Sep 1964 |
| Ministry | Ministry of Finance / Department of Economic Affairs |
| Department | Department of Economic Affairs |
| Jurisdiction | Central (Parliament of India) |
| Sections | 3 |
| Status | Not repealed |
| Last checked on India Code | 3 Nov 2026 |
| Source | India Code, Government of India |
Summary
Summary of Legal Tender (Inscribed Notes) Act, 1964
Key Provisions
1. Short Title and Extent: - May be called the Legal Tender (Inscribed Notes) Act, 1964.
• Extends to the whole of India.
2. Main Objective: - Restrict the negotiability of currency and other notes inscribed with messages of a political character.
3. Key Clause: - Section 2: Notes (currency, bank notes, or Government of India one-rupee notes) bearing extrinsic political messages are not legal tender.
• The Reserve Bank of India (RBI) has no obligation to receive, exchange, or refund such notes.
• Exception: RBI may refund the value as a grace.
4. Repeal and Savings: - Repeals: The Legal Tender (Inscribed Notes) Ordinance, 1942.
• Savings: Actions under the repealed ordinance are deemed as under this Act.
Legislative history
Legislative History:
The Legal Tender (Inscribed Notes) Act, 1964
● Act Title - The Legal Tender (Inscribed Notes) Act, 1964
● Act Number / Year - 28 of 1964
● Act ID (India Code) - 196428
● Presidential Assent Date - September 30, 1964
● Enforcement Date - September 30, 1964
● Nodal Ministry - Ministry of Finance
Precedent & Historical Rationale
● Disqualification of Defaced and Sloganeered Banknotes - Enacted to restrict currency notes inscribed with political, religious, or ideological slogans from maintaining legal tender status, thereby safeguarding the integrity and neutrality of the official currency.
● Exemption of Liability for Reserve Bank and Government - Formulated to explicitly declare that any currency note bearing an inscription, writing, or endorsement of a political nature shall cease to be legal tender, and to relieve the Reserve Bank of India (RBI) and the Central Government of any legal obligation to redeem or pay value for such inscribed notes.
Parliamentary Trajectory & Enactment
● Formulation - Introduced by the Ministry of Finance to curb the misuse of paper currency as a medium for public propaganda or political campaigning.
● Parliamentary Passage - Debated and passed by both Houses of Parliament (Third Lok Sabha and Rajya Sabha) during the September 1964 monsoon session.
● Presidential Assent - Received Presidential Assent on September 30, 1964.
● Enforcement - Enforced on September 30, 1964.
Source - Official Record of Parliament, India Code, and Ministry of Finance.