If banks refuse to exchange soiled notes, they can be fined Rs10,000

According to the RBI circular, if any bank branch refuses to exchange soiled notes from any member of the public, the bank has to pay a penalty of Rs10,000.

But there are some restrictions. According to a July 2016 RBI circular, if you exchange more than 20 notes, or notes worth Rs5,000 per day, banks may levy a service charge.