Jasleen Bakshi

The Reserve Bank of India laid down a detailed procedure for the exchange of the demonetized banknotes with new ₹500 & ₹2000 bank notes of newly issued series and ₹100 bank notes of previously circulated series.

Highlights as follows:

  • Citizens will have until 30 December 2016 to tender their old banknotes at any office of the RBI or any bank branch and credit the value into their respective bank accounts.
  • Cash withdrawals from bank accounts were restricted to ₹10,000 per day and ₹20,000 per week per account from 10 to 13 November 2016. This limit was increased to ₹24,000 per week from 14 November.
  • For immediate cash needs, the old banknotes can be exchanged for the new ₹500 and ₹2000 banknotes as well as ₹100 banknotes over the counter of bank branches by filling up a requisition form along with a valid ID proof. This exchange is restricted to once per person.
    • Initially, the limit was fixed at ₹4000 per person from 8 to 13 November 2016.
    • This limit was increased to ₹4500 per person from 14 to 17 November 2016.
    • The limit was reduced to ₹2000 per person from 18 November 2016.
    • Exchange of notes not allowed from 25.11.2016.
  • Initially, all ATMs were dispensing banknotes of only ₹50 and ₹100 denominations and cash withdrawals from ATMs were restricted to ₹2000 per day. From 14 November onwards, ATMs recalibrated to dispense new ₹500 and ₹2000 notes will allow a maximum withdrawal of ₹2,500 per day, while other ATMs dispensing banknotes of only ₹50 and ₹100 denominations will allow a maximum withdrawal of ₹2000 per day.

However, exceptions were given to petrolCNG and gas stations, government hospitals, railway and airline booking counters, state-government recognized dairies and ration stores, and crematoriums to accept the old ₹500 and ₹1000 banknotes until 11 November 2016, which was later extended to 14 November 2016 and once again to 24 November 2016.  International airports were also instructed to facilitate an exchange of notes amounting to a total value of ₹5000 for foreign tourists and out-bound passengers. From 25.11.2016 all such exemption been withdrawn in respect of old Note of Rs. 1000 denomination and been extended with few amendments for demonetised old note of Rs. 500 till 15.12.2016. More details on amendments in respect of old currency notes can be checked at following link :- Transactions for which payment in old Rs. 500 notes valid till 15.12.2016

Under the revised guidelines issued on 17 November 2016, families will be able to withdraw ₹250,000 for weddings from one account provided it was KYC compliant. The rules were also been changed for farmers who are permitted to withdraw ₹25,000 per week from their accounts.

(Author can be reached at jasleenbakshi20@gmail.com)

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