In my opinion, This is a Bold and beautiful step that our Prime Minister Mr. Narendra Modi has taken for demonetization of high value notes. I sincerely appreciate it and salute Modi government.
This will prove very much helpful in curbing black money and corruption.
This will adversely affect the network of terrorists, extremists and naxalites whose evil activities flourish day and night on the power of fake notes printed mostly in the country of enemy.
This will give great relief to common men on price rise front. Value of real estate properties will sharply come down because there will be no scope for demanding black money in selling a flat or house. Bad habit of Higher education Institutes and colleges demanding donations from students seeking admission in such prestigious colleges will immediately stop or at least get reduced giving relief to poor and middle class families.
All sales which take place without paying taxes will get stopped because people will no longer will be in a position to pay huge payment in small currencies.
People will soon learn dealing through account and stop trading in cash to evade payment of taxes. This will increase revenue of the government and enhance the capacity of the government in serving common men through public welfare scheme. Government will earn more to invest in infrastructure projects.
Culture of honest trading will develop. Public servants will no longer demand huge cash in bribe in lieu of doing a work in favour of public. Thus honesty culture will develop in government offices also.
Modi has really taken such a brilliant step which will solve many problems faced by common men as well as the economy of the country. This one Brahmastra fired by Mr. Modi will kill the giants of Corruption, terrorism , black money , fake money circulation, price rise and what not
This idea was propagated by Ramdeo Baba long ago.
I once again salute our PM fMr. Modi and his entire team for bold and beautiful step taken by them .
With a view to curbing financing of terrorism through the proceeds of Fake
Indian Currency Notes (FICN) and use of such funds for subversive activities such
as espionage, smuggling of arms, drugs and other contrabands into India, and for
eliminating Black Money which casts a long shadow of parallel economy on our
real economy, it has been decided to cancel the legal tender character of the High
Denomination bank notes of Rs.500 and Rs.1000 denominations issued by RBI till
now. This will take effect from the expiry of the 8th November, 2016.
2. Fake Indian Currency Notes (FICN) in circulation in these denominations
are comparatively larger as compared to those in other denominations. For a
common person, the fake notes look similar to genuine notes. Use of FICN
facilitates financing of terrorism and drug trafficking. Use of high denomination
notes for storage of unaccounted wealth has been evident from cash recoveries
made by law enforcement agencies from time to time. High denomination notes are
known to facilitate generation of black money.
In this connection, it may be noted that while the total number of bank notes in circulation rose by 40% between 2011 and 2016, the increase in number of notes of Rs.500/- denomination was 76% and for Rs.1,000/- denomination was 109% during this period.
New Series bank notes of Rs.500/- and Rs.2,000/- denominations will be introduced for circulation from 10th November, 2016. Infusion of Rs.2,000/- bank notes will be monitored and regulated by RBI. Introduction of new series of banknotes which will be distinctly different from the current ones in terms of look, design, size and colour has been planned.
3. The World Bank in July, 2010 estimated the size of the shadow economy for India at 20.7% of the GDP in 1999 and rising to 23.2% in 2007. There are similar estimates made by other Indian and international agencies. A parallel shadow economy corrodes and eats into the vitals of the country’s economy. It generates inflation which adversely affects the poor and the middle classes more than others. It deprives Government of its legitimate revenues which could have been otherwise used for welfare and development activities.
4. In the last two years, the Government has taken a number of steps to curb the menace of black money in the economy including setting up of a Special Investigation Team (SIT); enacting a law regarding undisclosed foreign income and assets; amending the Double Taxation Avoidance Agreement between India and Mauritius and India and Cyprus; reaching an understanding with Switzerland for getting information on Bank accounts held by Indians with HSBC; encouraging the use of non-cash and digital payments; amending the Benami Transactions Act; and implementing the Income Declaration Scheme 2016.
5. In order to implement the above decisions of the Government and keeping in view the need to minimise inconvenience to the public, the following operational guidelines have been issued:-
(i) Old High Denomination Bank Notes may be deposited by individuals/persons
into their bank accounts and/or exchanged in bank branches or Issue Offices
of RBI till the close of business hours on 30th December, 2016.
(ii) Old High Denomination Bank Notes of aggregate value of Rs.4,000/- only or
below held by a person can be exchanged by him/her at any bank branch or
Issue Office of Reserve Bank of India for any denomination of bank notes
having legal tender character, provided a Requisition Slip as per format to be
specified by RBI is presented with proof of identity and along with the Old
High Denomination Bank Notes. Similar facilities will also be made available
in Post Offices.
(iii) The limit of Rs.4,000/- for exchanging Old High Denomination Bank Notes at
bank branches or at issue offices of Reserve Bank of India will be reviewed
after 15 days and appropriate notification issued, as may be necessary.
(iv) There will not be any limit on the quantity or value of Old High
Denomination Bank Notes to be credited to the account of the tenderer
maintained with the bank, where the Old High Denomination Bank Notes are
tendered. However, in accounts where compliance with extant Know Your
Customer (KYC) norms is not complete, a maximum value of Rs.50,000/- of
Old High Denomination Bank Notes can be deposited.
(v) The equivalent value of the Old High Denomination Bank Notes tendered can
be credited to an account maintained by the tenderer at any bank in
accordance with standard banking procedure and on production of valid proof
of Identity.
(vi) The equivalent value of the Old High Denomination Bank Notes tendered can
be credited to a third party account, provided specific authorisation therefor
accorded by the said account holder is presented to the bank, following
standard banking procedure and on production of valid proof of Identity of the
person actually tendering.
(vii) Cash withdrawal from a bank account, over the counter will be restricted to
Rs.10,000/- subject to an overall limit of Rs. 20,000/- in a week for the first
fortnight, i.e., until the end of business hours on November 24, 2016.
(viii) There will be no restriction on the use of any non-cash method of operating
the account which will include cheques, demand drafts, credit/debit cards,
mobile wallets and electronic fund transfer mechanisms.
(ix) Withdrawal from ATMs would be restricted to Rs.2,000 per day per card up
to November 18, 2016. The limit will be raised to Rs.4,000 per day per card
from November 19, 2016 onwards.
(x) For those who are unable to exchange their Old High Denomination Bank
Notes or deposit the same in their bank accounts on or before December 30,
2016, an opportunity will be given to them to do so at specified offices of the
RBI on later dates along with necessary documentation as may be specified
by the Reserve Bank of India.
(xi) Instruction is also being issued for closure of banks and Government
Treasuries, on 9th November, 2016.
(xii) In addition, all ATMs, Cash Deposit Machines, Cash Recyclers and any other
machine used for receipt and payment of cash will remain shut on 9th and 10th
November, 2016.
(xiii) The bank branches and Government Treasuries will function from 10th
November, 2016.
(xiv) To avoid inconvenience to the public for the first 72 Hours, Old High
Denomination Bank Notes will continue to be accepted at Government
Hospitals and pharmacies in these hospitals/Railway ticketing counters/ticket
counters of Government/Public Sector Undertaking buses and airline ticketing
counters at airports; for purchases at consumer co-operative societies, at milk
booths, at crematoria/burial grounds, at petrol/diesel/gas stations of Public
Sector Oil Marketing Companies and for arriving and departing passengers at
international airports and for foreign tourists to exchange foreign currency at
airports up to a specified amount.
Frequently Asked Questions are Answered below for your convenience.
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1. Why is this scheme introduced?
The incidence of fake Indian currency notes in higher denomination has increased. For ordinary persons, the fake notes look similar to genuine notes, even though no security feature has been copied. The fake notes are used for antinational and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. India remains a cash based economy hence the circulation of Fake Indian Currency Notes continues to be a menace. In order to contain the rising incidence of fake notes and black money, the scheme to withdraw has been introduced.
2. What is this scheme?
The legal tender character of the existing bank notes in denominations of ₹500 and ₹1000 issued by the Reserve bank of India till November 8, 2016 (hereinafter referred to as Specified Bank Notes) stands withdrawn. In consequence thereof these Bank Notes cannot be used for transacting business and/or store of value for future usage. These Bank Notes can be exchanged for value at any of the 19 offices of the Reserve Bank of India or at any of the bank branches or at any Head Post Office or Sub-Post Office.
3. How much value will I get?
You will get value for the entire volume of notes tendered at the bank branches / RBI offices.
4. Can I get all in cash?
No. You will get upto ₹4000 per person in cash irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account.
5. Why I cannot get the entire amount in cash when I have surrendered everything in cash?
The Scheme does not provide for it, given its objectives.
6. ₹4000 cash is insufficient for my need. What to do?
You can use balances in bank accounts to pay for other requirements by cheque or through electronic means of payments such as Internet banking, mobile wallets, IMPS, credit/debit cards etc.
7. What if I don’t have any bank account?
You can always open a bank account by approaching a bank branch with necessary documents required for fulfilling the KYC requirements.
8. What if, if I have only JDY account?
A JDY account holder can avail the exchange facility subject to the caps and other laid down limits in accord with norms and procedures.
9. Where can I go to exchange the notes?
The exchange facility is available at all Issue Offices of RBI and branches of commercial banks/RRBS/UCBs/State Co-op banks or at any Head Post Office or Sub-Post Office.
10. Need I go to my bank branch only?
For exchange upto 4000 in cash you may go to any bank branch with valid identity proof.
For exchange over 4000, which will be accorded through credit to Bank account only, you may go to the branch where you have an account or to any other branch of the same bank.
In case you want to go to a branch of any other bank where you are not maintaining an account, you will have to furnish valid identity proof and bank account details required for electronic fund transfer to your account.
11. Can I go to any branch of my bank?
Yes you can go to any branch of your bank.
12. Can I go to any branch of any other bank?
Yes, you can go to any branch of any other bank. In that case you have to furnish valid identity proof for exchange in cash; both valid identity proof and bank account details will be required for electronic fund transfer in case the amount to be exchanged exceeds ₹4000.
13. I have no account but my relative / friend has an account, can I get my notes exchanged into that account?
Yes, you can do that if the account holder relative/friend etc. gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof.
14. Should I go to bank personally or can I send the notes through my representative?
Personal visit to the branch is preferable. In case it is not possible for you to visit the branch you may send your representative with an express mandate i.e. a written authorisation. The representative should produce authority letter and his / her valid identity proof while tendering the notes.
15. Can I withdraw from ATM?
It may take a while for the banks to recalibrate their ATMs. Once the ATMs are functional, you can withdraw from ATMs upto a maximum of ₹2,000/- per card per day upto 18th November, 2016. The limit will be raised to ₹4000/- per day per card from 19th November 2016 onwards.
16. Can I withdraw cash against cheque?
Yes, you can withdraw cash against withdrawal slip or cheque subject to ceiling of ₹10,000/- in a day within an overall limit of ₹20,000/- in a week (including withdrawals from ATMs) upto 24th November 2016, after which these limits shall be reviewed.
17. Can I deposit Specified Bank Notes through ATMs, Cash Deposit Machine or cash Recycler?
Yes, Specified Bank Notes can be deposited in Cash Deposits machines / Cash Recyclers.
18. Can I make use of electronic (NEFT/RTGS /IMPS/ Internet Banking / Mobile banking etc.) mode?
You can use NEFT/RTGS/IMPS/Internet Banking/Mobile Banking or any other electronic/ non-cash mode of payment.
19. How much time do I have to exchange the notes?
The scheme closes on 30th December 2016. The Specified banknotes can be exchanged at branches of commercial banks, Regional Rural Banks, Urban Cooperative banks, State Cooperative Banks and RBI till 30th December 2016.
For those who are unable to exchange their Specified Bank Notes on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI, along with necessary documentation as may be specified by the Reserve Bank of India.
20. I am right now not in India, what should I do?
If you have Specified banknotes in India, you may authorise in writing enabling another person in India to deposit the notes into your bank account. The person so authorised has to come to the bank branch with the Specified banknotes, the authority letter given by you and a valid identity proof (Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff)
21. I am an NRI and hold NRO account, can the exchange value be deposited in my account?
Yes, you can deposit the Specified banknotes to your NRO account.
22. I am a foreign tourist, I have these notes. What should I do?
You can purchase foreign exchange equivalent to ₹5000 using these Specified Bank Notes at airport exchange counters within 72 hours after the notification, provided you present proof of purchasing the Specified Bank Notes.
23. I have emergency needs of cash (hospitalisation, travel, life saving medicines) then what I should do?
You can use the Specified Bank Notes for paying for your hospitalisation charges at government hospitals, for purchasing bus tickets at government bus stands for travel by state government or state PSU buses, train tickets at railway stations, and air tickets at airports, within 72 hours after the notification.
24. What is proof of identity?
Valid Identity proof is any of the following: Aadhaar Card, Driving License, Voter ID Card, Pass Port, NREGA Card, PAN Card, Identity Card Issued by Government Department, Public Sector Unit to its Staff.
25. Where can I get more information on this scheme?
Further information is available on our website (www.rbi.org.in) and the website of the Government of India (www.finmin.nic.in)
26. If I have a problem, whom should I approach?
You may approach the control room of RBI by email or on Telephone Nos 022 22602201/022 22602944
Government of India vide their Notification no. 2652 dated November 8, 2016 have withdrawn the Legal Tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016.
This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.
Starting from November 10, 2016, members of public/corporates, business firms, societies, trusts, etc., holding these notes can tender them at any office of the Reserve Bank or any bank branch and obtain value thereof by credit into their respective bank accounts.
For their immediate cash needs, these notes of value up to ₹ 4,000 per person can be exchanged for cash over the counter of these bank branches.
Public are advised to present a valid proof of identity for availing this exchange facility.
Value credited to their bank accounts can be freely used by issue of cheques or by remitting through various electronic modes of transfer like NEFT, RTGS, IMPS, mobile banking, internet banking etc. Cash withdrawals from bank accounts, over the bank counters, will be restricted to a limited amount of ₹ 10,000 per day subject to an overall limit of ₹ 20,000 a week from November 9, 2016 till end of business on November 24, 2016. The limits will be reviewed after this.
All ATMs and other cash machines will remain shut on November 9, 2016 to facilitate recalibration. When ready, they will be reactivated and cash drawals from ATMs will be restricted to ₹ 2,000 per day per card up to November 18, 2016 and the limits shall be raised to ₹ 4000 per day per card from November 19, 2016.
Any person who is unable to exchange or deposit the specified banknotes in their bank accounts on or before December 30, 2016 shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by the Reserve Bank.
For more details members of the public may visit RBI website www.rbi.org.in and Government web site www.gov.nic.in for further information and details.
6. The relevant Notifications are available in the website of Finance Ministry (http://finmin.nic.in/). Further details including Frequently Asked Questions (FAQs) are available on the website of the Reserve Bank of India (https://www.rbi.org.in/).
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