(Updated
as on January 04, 2017)
1.
Why was the Scheme of Withdrawal of Legal Tender Character of
the old Bank Notes in the denominations of ₹
500 and ₹
1000 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 legal tender character of the old Bank Notes in
the denominations of ₹
500 and ₹
1000 was introduced.
2.
What is this scheme?
The
legal tender character of the 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withdrawn.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. The Specified Bank Notes (SBNs) were allowed to be
exchanged for value at RBI Offices till December 30, 2016 and
till November 25, 2016 at bank branches/Post Offices and
deposited at any of the bank branches of commercial
banks/Regional Rural Banks/Co-operative banks (only Urban
Co-operative Banks and State Co-operative Banks) or at any
Head Post Office or Sub-Post Office during the period from
November 10, 2016 to December 30, 2016.
The
facility for exchange / deposit of SBNs stands closed with
effect from December 31, 2016.
3.
What is the Specified Bank Notes (Cessation of Liabilities)
Ordinance 2016?
The
Specified Bank Notes (Cessation of Liabilities) Ordinance 2016
has been promulgated by the President of India (GoI Ordinance
No. 10 of 2016 dated December 30, 2016) to provide for
cessation of liabilities on the Specified Banknotes and for
connected/incidental matters and comes into effect from
December 31, 2016. In terms of this ordinance, with effect
from December 31, 2016, the Specified Bank Notes shall cease
to be the liabilities of the Reserve Bank of India and shall
cease to have the guarantee of the Central Government.
A
grace period has been provided during which the Specified Bank
Notes can be deposited at five RBI Offices (Mumbai, New Delhi,
Chennai, Kolkata, and Nagpur) in accordance with this
Ordinance by Indian citizens who make a declaration that they
were outside India between November 9 and December 30, 2016,
subject to conditions or any class of persons for reasons that
may be specified by notification by the Central Government.
The
Reserve Bank, if satisfied after making the necessary
verifications, that the reasons for failure to deposit the
notes till December 30, 2016 are genuine, will credit the
value of notes in the KYC (Know Your Customer) compliant bank
account of the tenderer.
Holding
the specified banknotes (SBNs) for the purpose of deposit by
Resident Indian citizens who were abroad during November 9,
2016 to December 30, 2016 and Non Resident Indian citizens who
were abroad during November 9, 2016 to December 30, 2016 is
permissible during grace period. With
effect from January 2, 2017 Resident Indian citizens who were
abroad during November 9, 2016 to December 30, 2016 can avail
this facility upto March 31, 2017 and Non Resident Indian
citizens who were abroad during November 9, 2016 to December
30, 2016 can avail this facility upto June 30, 2017. While
there is no monetary limit for exchange for the eligible
Resident Indians, the limit for NRIs will be as per the
relevant FEMA Regulations. In terms of Section 6 of the
Ordinance, whoever knowingly or wilfully makes any false
declaration shall be punishable with a fine which may extend
to 50,000 INR or five times the amount of the face value of
the SBNs tendered whichever is higher. Any person aggrieved by
the refusal of the Reserve Bank to credit the value of notes
as mentioned above may make a representation to the Central
Board of the Reserve Bank within 14 days of the communication
of such refusal to him/her.
In
terms of Section 5 of the Ordinance, from December 31, 2016 no
person shall knowingly or voluntarily hold, transfer or
receive any specified banknotes. After
the expiry of grace period, holding of not more than 10 notes
in total, irrespective of denomination or not more than 25
notes for the purpose of study/ research/ numismatics is
permitted. In
terms of Section 7, contravention of Section 5 shall be
punishable with fine which may extend upto 10,000 INR or five
times the face value of the SBNs involved in the
contravention, whichever is higher.
In
case the contravention/default in terms of Sections 6 and 7 is
by a company, every person who was in charge of and
responsible to the company at the time of contravention/
default shall deemed to be guilty and will be liable to be
proceeded against and punished. If the offence is proved to be
attributable to the conduct by any
director/manager/secretary/officer/employee of the company,
such person shall also be deemed to be guilty of the offence
and will be liable to be proceeded against and punished
accordingly.
4.
How can NRIs and the Indian citizens who were abroad exchange
the SBNs?
In
terms of Paragraph 4.1 of the GoI Ordinance No. 10 of 2016
dated December 31, 2016 on “The Specified Bank Notes
(Cessation of Liabilities), a facility for exchange of SBNs is
made available for the resident and non-resident citizens who
could not avail the facility from November 10 to December 30,
2016 on account of their absence from India during the
aforementioned period. The facility will remain open for
residents from January 2, 2017 to March 31, 2017 and for NRIs
from January 2, 2017 to June 30, 2017 at five Reserve Bank
offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur.
The
facility can be availed only in individual capacity and only
on one occasion during the period. No third party tender is
permissible under the facility.
This
facility will not be available for Indian citizens resident in
Nepal, Bhutan, Pakistan and Bangladesh.
The
details of the facility including terms/ conditions and
modalities thereof are available in our circular
DCM (Plg) No 2170/10.27.00/2016-17 dated December 31, 2016.
5.
Is the facility for exchange of SBNs by NRIs available outside
India?
No.
For NRIs the facility is available from January 2, 2017 to
June 30, 2017 at five Reserve Bank offices at Mumbai, New
Delhi, Chennai, Kolkata, and Nagpur. The limit of exchange for
NRIs will be as per the relevant FEMA Regulations.
6.
Is the facility available to Overseas Citizens of India
(OCI)/Persons of Indian Origin (PIO)?
No,
the facility is not available to OCIs/PIOs.
7.
Is the facility available to resident Indians?
No,
the facility is not available to all resident Indians, but
only to those who were not in India during the period November
9, 2016 to December 30, 2016.
8.
How much amount can I withdraw from an ATM?
The
daily limit of withdrawal from ATMs has been increased (within
the overall weekly limits specified) with effect from January
01, 2017, from the existing ₹
2500/- to ₹
4500/- per day per card. There is no change in weekly
withdrawal limits.
9.
What are the withdrawal limits for JDY account holders?
A
JDY account holder can avail the deposit facility till
December 30, 2016 subject to the caps and other laid down
limits in accord with norms and procedures.
With
a view to protecting the innocent farmers and rural account
holders of PMJDY from activities of money launderers and legal
consequences under the Benami Property Transaction & Money
Laundering laws, it has been decided to place certain limits,
as a matter of precaution, on the operations in the PMJDY
accounts funded through deposits of Specified Bank Notes
(SBNs) after November 09, 2016. As a temporary measure, the
banks have been advised that:
(1)
Fully KYC compliant account holders may be allowed to withdraw
₹
10,000 from their account, in a month. The branch managers may
allow further withdrawals beyond ₹10,000
within the current applicable limits only after ascertaining
the genuineness of such withdrawals and duly documenting the
same on the bank’s record.
(2)
Limited or Non-KYC compliant account holders may be allowed to
withdraw ₹
5,000 per month from the amount deposited through SBNs after
November 09, 2016 within the overall ceiling of ₹
10,000.
10.
Does the limit of ₹24,000
withdrawal apply to withdrawals from bank account of one bank
from another bank?
These
limits are not applicable to cash withdrawal from a bank
account by one bank from another bank, Post Office, Money
Changers operating at International airports and operators of
White Label ATMs. The branches maintaining Currency Chests
have been advised to accommodate the requests from other
branches in their vicinity – linked or otherwise – for
supply of cash.
11.
What are the withdrawal limits in case of DCCBs?
District
Central Cooperative Banks (DCCBs) can allow their existing
customers to withdraw money from their accounts upto ₹
24,000 per week. The Reserve Bank has accordingly advised all
banks to permit withdrawal of cash by DCCBs from their
accounts based on need.
12.
Can I withdraw cash against cheque?
Yes,
you can withdraw cash against withdrawal slip or cheque
subject to a weekly limit of ₹
24000 (including withdrawals from ATMs and over the counter)
from the bank accounts.
Business
entities having Current Accounts which are operational for
last three months or more will be allowed to draw ₹
50,000 per week. This can be done in a single transaction or
multiple transactions. This facility has been extended to
Overdraft and Cash Credit accounts and traders registered with
the Agricultural Produce Market Committee (APMC) markets or
mandis. Accordingly, holders of current/overdraft/cash credit
accounts, which are operational for the last three months or
more, may withdraw upto ₹
50,000 in cash, in a week. Such withdrawals may be disbursed
predominantly in ₹
2,000 denomination bank notes. This enhanced limit for weekly
withdrawal is not applicable for personal overdraft accounts.
Farmers are allowed to draw upto ₹
25,000 per week in cash from their loan (including Kisan
Credit Card limit) or deposit accounts subject to their
accounts being compliant with the extant KYC norms.
13.
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. In order to meet
the transactional needs of the public through digital means,
additional measures have been introduced by way of special
dispensation for small merchants and enhancement in limits for
semi-closed Prepaid Payment Instruments (PPIs).
14.
What is being done for the farmers?
Farmers
are allowed to draw upto ₹
25,000 per week in cash from their loan (including Kisan
Credit Card limit) or deposit accounts subject to their
accounts being compliant with the extant KYC norms.
Towards
ensuring unhindered farming operations during the Rabi crop
season, NABARD would be utilizing its own cash credit limits
up to about ₹
23,000 crore to enable the DCCBs to disburse the required crop
loans to PACS and farmers. Banks with currency chests have
been advised to ensure adequate cash supply to the DCCBs and
RRBs. Adequate cash supply should also be ensured for rural
branches of all commercial (including RRBs). Bank branches
located in APMCs may also be given adequate cash to facilitate
smooth procurement.
15.
Where can I get more information on this scheme/ ordinance?
Further
information is available on our website (www.rbi.org.in)
and the website of the Government of India (www.finmin.nic.in)
Also
see:
All
You wanted to know from RBI about: Withdrawal of Legal Tender
Status of ₹
500 and ₹
1000 Notes
16.
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
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