Undeclared income and counterfeit notes will soon come under fire, with the RBI recently releasing a directive to the general public as well as banks, calling for the withdrawal of higher-denomination currency notes issued prior to 2005. 
The central bank has sent out a notice to have all the Rs 500 and Rs 1000 printed notes before 2005, which lack the year printed on the back of the note to be exchanged at banks in order to “standardize and improve note printing standards”. 
The Reserve Bank has made it clear that this is not a demonetization like was carried out in 1978, where all 500, 1000 and 10,000 notes were completely withdrawn from the market, without the benefit of a replacement. The RBI intends this as a measure to curb counterfeiting operations and undeclared income, despite claiming that is just an exercise in unifying currency standards. The statement by the RBI reads that pre-2005 notes will still be considered legal tender but, people are discouraged from using them for purchased after the first of April. 
A spokesperson for the central bank also said “A demonetization would have meant a sudden deadline and possibly demanding an explanation of the source of the money tendered at the banks. We are aiming for nothing of the sort,” The RBI has directed all banks to open their money chests and provide facilities to expedite the exchange of the notes brought in by customers as well as others. The exchange of notes will be freely carried out till July, 2014, after which anyone exchanging more than 10 500 and 1000 denomination notes will have to provide ID proof as well as proof of residence to the bank. 
This move by the RBI will force currency hoarders to either spend or exchange their notes by making the notes obsolete, making it easy to track the source of the money. This move will also cause a shift to cashless transactions.