Chaos even after Indian Government Issued New Currency Notes of Rs 500 and Rs 2000 promising easy exchange at Banks
In a country where taxi drivers and shopkeepers are already reluctant to part with small bills, the sudden policy change have complicated the business transactions.
Much of the government’s new initiative remains mired in confusion. It is not clear exactly what will be the effect on the money supply or whether it will take out a lot of cash in circulation.
In a statement issued today, the Reserve Bank of India has said that consequent to the withdrawal of Legal Tender Character of existing ₹ 500 and ₹ 1000 Bank Notes, it has made arrangements to distribute the notes in new ₹ 2000 and other denominations across the country.
RBI claimed “There is enough cash available with banks and all arrangements have been made to reach the currency notes all over the country”. Bank branches have already started exchanging notes since November 10, 2016.
Still through out India long lines of people could be seen outside bank branches as people queued up to exchange the now-invalidated currency notes of Rs 500 and Rs 1,000. In additions many cities across India, banks were scrambling for the new notes leading to longer lines.
Above all unexpected formalities kept the queues frozen for a while.
Many customers complained of not being informed about technicalities involved before arriving at the bank. “Now they are telling us that money has to be deposited or exchanged only at home branches. We were not even informed that we had to get self-attested photocopies of our identity proof.
“This is a financial chaos and disaster let loose on the common people of India,” Mamata Banerjee, West Bengal chief minister tweeted.
Uddhav Thackeray, the Shiv Sena supremo said “This is not the way to do things. You can’t beat someone to death and convince him that it is being done for his own benefit,”
Thackeray demanded that if banks were running out of cash then the government should make everything free including medical care, hospitalisation, purchase of groceries and daily need utilities free of cost till banks replenish their cash reserves.
RBI mentioned , it may take a while for the banks to recalibrate their ATMs; once the ATMs are functional, members of public will be able to withdraw from ATMs upto a maximum of ₹ 2,000 per card per day up to November 18, 2016; and after that withdraw up to ₹4000 per day per card. Several ATMs have started functioning from this morning as the banks could complete recalibration of these machines to allow withdrawals up to ₹ 2000 to begin with.
RBI gets the notes from four presses. The Security Printing and Minting Corporation of India (SPMCIL) has presses at Nashik in Maharashtra and Dewas in Madhya Pradesh. The other two are owned by RBI, through a subsidiary, Bharatiya Reserve Bank Note Mudran (BRBNML), at Mysuru, Karnataka, and Salboni in Bengal.
A shortage of new denomination notes of Rs 500 and Rs 2,000 as being witnessed in various bank branches.
The facility for exchanging the withdrawn denominations of ₹ 500 and ₹ 1000 is available for nearly 50 days. The Reserve Bank appeals to members of public to be patient and urges them to exchange their old notes at their convenience, any time before December 30, 2016.
Applicants are getting a ‘request slip’ which clearly mentions that Aadhar card, pan card, driving license, passport, or voter ID card will serve the purpose of an official proof.
The Reserve Bank appeals to members of public to be patient and urges them to exchange their old notes at their convenience, any time before December 30, 2016.
FAQs on Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of ₹ 500/- and ₹ 1000/-
(Updated as on November 11, 2016)
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. The Specified 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 of commercial banks/ Regional Rural Banks/ Co-operative banks or at any Head Post Office or Sub-Post Office.
3. Does the scheme apply to pre 2005 banknotes of ₹500 and ₹1000?
Yes the specified banknotes include pre 2005 banknotes in the denominations of ₹500 and ₹1000.
4. How much value will I get?
You will get value for the entire volume of notes tendered at the bank branches / RBI offices.
5. Can I get all in cash?
No. You will get upto ₹4000 per person in cash exchange irrespective of the size of tender and anything over and above that will be receivable by way of credit to bank account.
6. 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.
7. ₹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.
8. 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.
9. 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.
10. 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/ Co-operative banks or at any Head Post Office or Sub-Post Office.
11. 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.
12. Can I go to any branch of my bank?
Yes you can go to any branch of your bank.
13. 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.
14. 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.
15. 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.
16. 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.
17. Does the limit of ₹ 10,000 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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)
23. 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.
24. 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.
25. I have emergency needs of cash (hospitalisation, travel, life saving medicines) then what I should do?
Till the 11th November, 2016, specified banknotes can be used as under:—
(a) for making payments in Government hospitals for medical treatment and pharmacies in Government hospitals for buying medicines with doctor’s prescription;
(b) at railway ticketing counters, ticket counters of Government or Public Sector Undertakings buses and airline ticketing counters at airports for purchase of tickets;
(c) for purchases at consumer cooperative stores operated under authorisation of Central or State Governments;
(d) for purchase at milk booths operating under authorisation of the Central or State Governments;
(e) for purchase of petrol, diesel and gas at the stations operating under the authorisation of Public Sector Oil Marketing Companies;
(f) for payments at crematoria and burial grounds;
(g) at international airports, for arriving and departing passengers, who possess specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character;
(h) for foreign tourists to exchange foreign currency or specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character.
(i) for making payments in all pharmacies on production of doctor’s prescription and proof of identity;
(j) for making payments on all toll plazas on the State and National Highways;
(k) for payments on purchases LPG gas cylinders;
(l) for making payments to catering services on board, during travel by rail;
(m) for making payments for purchasing tickets for travel by suburban and metro rail services;
(n) for making payments for purchase of entry tickets for any monument maintained by the Archeological Survey of India.
26. Can I use the Specified banknotes to settle outstanding in my loan account?
Deposits of Specified bank Notes into all types of deposit/loan accounts is allowed subject to CTR/STR reporting.
27. 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.
28. Where can I get more information on this scheme?
29. 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
New Indian currencies
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