Rs.500/ Rs. 1000 banned: 20 points you must know about the withdrawal of legal tender

Introduction

Within a span of 15 minutes the of the speech given by Prime Minister Modi, India shook more than the America would have shaken on 9/11. With a ban on Rs.500 and Rs.1000 currency note, India did a surgical strike on the menace of corruption, black money, terror funding, etc. This is one of the biggest, and the boldest step ever takes by any Prime Minister on the issue of black money.

No doubt, this step of PM Modi could turn out to be one of the most crucial steps in the history of Indian economy. This step will certainly jeopardise the parallel economy in India.

Let us understand 20 points which you must know about the currency ban in India:

#Point 1 – Why Rs.500/1000 banned:

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 anti-national 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. To contain the rising incidence of fake notes and black money, the scheme to withdraw has been introduced.

#Point 2 – Impact of the Ban: Since Government has to cease the currency notes of Rs.500/1000 to be a valid legal tender that means that no person can accept or transact from this currency nor they can store for future transaction w.e.f 8th November 2016.

These notes should be immediately exchanged/deposited with new currency 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. This exchange of money can be done by the following documents:

• Requisition slip
• Proof of Identity
• Old currency notes

#Point 3 – Time limit for exchange:

These notes can be deposited/exchanged till the closure of business hours on 30th December 2016. In the case for any reason, you were not able to exchange the currency on time. Then also don’t panic. You currency and hard earned money will be safe.

To exchange that money, you might have to visit the Reserve Bank office and get the work done.

#Point 4 – Maximum ceiling on Exchange and Deposit:

Any person can get the money exchanged of not more than Rs.4000. Anything over and above will be transferred to bank account.  This clearly shows that government wants to discourage the cash transactions.

#Point 5 – No Limit on cash acceptance at bank:  

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 renderer maintained with the bank, where the Old High Denomination Bank Notes are tendered bank.

#Point 6 –Amount deposited can be transferred to the third person: 

Any cash deposited can be credited to an account maintained by the tenderer at any bank by standard banking procedure and on the production of valid proof of Identity.

#Point 7 - Limit on cash withdrawal:

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.  

#Point 8 – No ban on plastic money:

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.

#Point 9 – Limit on ATM withdrawal:

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.

#Point 10 – Validity of Notes in some cases:

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.

#Point 11 – No Transaction Charge:

No transaction charge will be deducted by the bank in any case. You will get the full value of the money exchanged or deposited.

Apart from the 11 points above, here are 9 FAQs which might also b very useful:

#Point 12 – Valid ID Proof:

Any of the followings is treated as valid ID proof:

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.

13. Rs. 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.

14. 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.

15. Need I go to my bank branch only?

For exchange up to 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.

16. 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.

17. Should I go the to the bank personally or can I send the notes through my representative? - IMPORTANT

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.

18. I am right now not in India, what should I do?

If you have OHD 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 OHD banknotes, the authority letter given by you and a valid identity proof.

19. I am an NRI and hold NRO account, can the exchange value be deposited in my account?

Yes, you can deposit the OHD banknotes to your NRO account.

20. 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.

Conclusion

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