Chapter III — Central Banking Functions
Section 28A: Issue of special bank notes and special one rupee notes in certain cases
Reviewed by CA Nikhil Gupta · Last reviewed 18 September 2026
Section 28A authorises issue of special bank notes and special one-rupee notes for circulation outside India in specified circumstances and provides that such notes are not legal tender in India.
Operative provisionOfficial sources mappedProvision-specific decode
Finin2min - Section 28A in 2 minutes
Statutory structure and clause / subsection decode
This map separates the operative limbs of this provision so thresholds, powers, conditions and exceptions are not collapsed into a single summary.
Scope
Section 28A authorises issue of special bank notes and special one-rupee notes for circulation outside India in specified circumstances and provides that such notes are not legal tender in India.
Operative limb
The key distinction is territorial/special circulation: these instruments are not ordinary domestic legal-tender notes despite being issued under sovereign authority.
Legal boundary
Historical currency research should identify the territory and scheme under which the special note was issued.
Worked practical example
Facts. A special note issued for use in a territory outside India cannot be tendered domestically as ordinary legal tender merely because it resembles an Indian note.
Compliance points and common mistakes
- Do not decide the issue from the heading alone. Map the facts to the operative words of Section 28A and to each relevant subsection, clause, proviso or explanation shown above.
- Keep the statutory question separate from the operational overlay. Historical currency research should identify the territory and scheme under which the special note was issued.
- Do not convert an exception, exemption or discretionary RBI/Government power into an automatic entitlement. Record the authority, conditions and effective date.
- Where the provision is historical, omitted or repealed, state that status prominently and do not present it as a current compliance obligation.
Connected provisions and instruments
Section 28A has no universal instrument dependency in this package. Add an RBI circular or direction only when its subject, entity and effective date cover the issue being analysed.
Questions and answers
What is the purpose of Section 28A?
Issue of special bank notes and special one rupee notes in certain cases: Section 28A authorises issue of special bank notes and special one-rupee notes for circulation outside India in specified circumstances and provides that such notes are not legal tender in India.
Which statutory limb should be checked first?
Scope - Section 28A authorises issue of special bank notes and special one-rupee notes for circulation outside India in specified circumstances and provides that such notes are not legal tender in India.
What is the next legal boundary?
Operative limb - The key distinction is territorial/special circulation: these instruments are not ordinary domestic legal-tender notes despite being issued under sovereign authority.
What record should support the conclusion?
Section 28A file evidence: Collectors and advisers should not infer current domestic legal tender from the fact that an instrument bears RBI/Government features.
Primary sources
- Department of Financial Services - consolidated RBI Act (states amendments through Finance Act, 2022)
- India Code - Reserve Bank of India Act, 1934
Source control for Section 28A: use the official consolidated RBI Act for the statutory text and footnotes, then separately reconcile any post-Finance Act 2022 amendment, commencement notification or RBI instrument relevant to the event date.