All you need to know about the withdrawal of the old Rs 500 & Rs 1000 notes

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Worried about the withdrawal of the old Rs 500 and Rs 1000 notes? Here is all that you need to know.

The Government of India took everybody by surprise by withdrawing the legal tender status of the existing Rs 500 and Rs 1000 notes. In simple terms, the old notes will no more be valid and cannot be used in any transactions. Here is a dummy’s guide to all your questions about this development.

What happens to the old notes with citizens?

The government has notified detailed rules for exchange and deposit of the old notes with citizens and organizations. The following are the rules for Exchanges & Deposits.

Exchanges

The specified bank notes held by a person may be exchanged at any Issue Office of the Reserve Bank or any branch of public sector banks, private sector banks, foreign banks, Regional Rural Banks, Urban Cooperative Banks and State Cooperative Banks up to 30th December, 2016 subject to the following conditions

  • An aggregate value of Rs 4,000/- or below may be exchanged for any denomination of bank notes with a requisition slip in the format specified by the RBI and proof of identity.
  • The limit of Rs 4,000/- for exchanging specified bank notes shall be reviewed after fifteen days.

Deposits

The following rules will govern the deposits.

  • There shall be no limit on the quantity or value of the specified bank notes to be credited to the account maintained with the bank.
  • If the relevant KYC norms is not complete in an account, then the maximum value of that can be deposited will be Rs 50,000/-
  • The equivalent value of specified bank notes will be credited to the person’s account on production of valid proof of identity.

Cash Withdrawal at Bank Branches

  • Cash withdrawal from a bank account over the counter shall be restricted to Rs 10,000/- per day subject to an overall limit of Rs  20,000/- a week up to 24th November, 2016 after which these limits shall be reviewed.
  • There shall be no restriction on the use of any non-cash method of operating the account of a person including cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer mechanisms.

 ATM Withdrawals

  • Withdrawal from ATMs shall be restricted to Rs 2,000 per day per card up to 18th November, 2016 and the limit shall be raised to Rs 4,000 per day per card from 19th November, 2016

 Are there any exceptions?

For the convenience of citizens, the government had notified certain agencies that can still accept the old notes till 11th November, 2016.  The following agencies are authorized to accept the old notes only from 09th November, 2016 to 11th November 2016. They also have to keep a stock of the sales during these dates.

  • For making payments in Government hospitals for medical treatment and pharmacies in Government hospitals for buying medicines with doctor’s prescription.
  • At railway ticketing counters, ticket counters of Government or Public Sector Undertakings buses and airline ticketing counters at airports for purchase of tickets.
  • For purchases at consumer cooperative stores operated under authorisation of Central or State Governments.
  •  For purchase at milk booths operating under authorisation of the Central or State Governments.
  •  For purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies.
  • For payments at crematoria and burial grounds
  • At international airports, for arriving and departing passengers, who possess specified bank notes, the value of which does not exceed Rs 5000/- to exchange them for other notes.
  • For foreign tourists to exchange foreign currency or specified bank notes, the value of which does not exceed Rs 5000/- to exchange them for other notes.

What happens if the notes are not deposited or exchanged by December 30th, 2016?

Any person who is unable to exchange or deposit the specified bank notes in their bank accounts on or before the 30th December, 2016, shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date.

Closure of Banks & ATMs

Every banking company and every Government Treasury shall be closed for the transaction of all business on 9th November, 2016

All ATMs, Cash Deposit Machines, Cash Recyclers and any other machine used for receipt and payment of cash shall be shut on 9th and 10th November, 2016.

Introduction of the new Rs 500 & Rs 2000 notes

The RBI has also introduced a new series of Rs 500 and Rs 2000 notes that will be brought into circulation immediately.

Dedicated Helpline of the RBI

One may approach the control room of RBI by email or on Telephone Nos 022-22602201/022-22602944.

RBI has also put up a list of FAQs for everybody to read up.

 

 

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4 Comments

  1. the section 26(2) of the RBI Act does not empowers the government to impose conditions on withdrawal of existing on one’s bank account which have been imposed by condition (vi) of the notification dated 8/11/16 and this is also voilative of article 300A of the Constitution

    Further the language of the section 26(2) of the RBI Act seems to be such that it only empowers certain series of the bank notes not the notes of a particular denomination

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