A banknote of which a portion is missing, or which is composed of more than two pieces, but does not include a note merely washed, cleaned, or altered in color, is classified by the Reserve Bank of India as a —

Correct option is B

According to the Reserve Bank of India (Note Refund) Rules, 2018, notified under Section 28 of the RBI Act, 1934, a “mutilated note” is defined as: "A note of which a portion is missing, or which is composed of more than two pieces, is termed as a mutilated note.”

Such notes may be exchanged at designated bank branches and RBI Issue Offices, subject to conditions — mainly that the remaining portion of the note is sufficient to establish its genuineness and to assess its value as per the prescribed area-based refund criteria.

Mutilated notes differ from soiled notes, which are simply dirty, disfigured, or damaged through normal wear and tear but remain in one piece.

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