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Understanding Demonetization

Understanding Demonetization

Why Demonetization?

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 the specified notes has been introduced.

What is Demonetization?

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issued by the Reserve bank of India till November 8, 2016 (hereinafter referred to as Specified Bank Notes) stands withdrawn.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.

District Central Cooperative Banks (DCCBs) can allow their existing customers to withdraw money from their accounts upto (₹24,000 per week upto November 24, 2016. No exchange facility against the specified bank notes (₹500 and ₹1000) or deposit of such notes should be entertained by DCCB’s. The Reserve Bank has accordingly advised all banks to permit withdrawal of cash by DCCBs from their accounts based on need.

How much time to exchange the notes and make cash deposits?

The scheme closes on December 30, 2016. The Specified banknotes upto ₹4500 per day can be exchanged at branches of commercial banks, Regional Rural Banks, Urban Cooperative banks, State Cooperative Banks and RBI till November 24, 2016 and the cash amount can be deposited till 30th December, 2016, at specified RBI offices. As there is ample time, people need not rush to exchange putting avoidable strain on the banking branch network.

Proof of identity that needs to be carried to exchange/ deposit the Specified bank notes

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.

A brief summary of the dates, events and remarks are given below for your better understanding:

Start Date

Particulars

End Date

Limits (Rs.)

Remarks

8-11-2016

Old Currency notes are no longer valid. Certain specified outlets still accept the old currency till the end date.

11-11-2016

will still be accepted in Petrol Pumps, government hospitals, Railway, airline, government bus ticket booking counters, Consumer co-operative stores run by state or central government, Milk booths authorized by state governments, Crematoriums and burial grounds till 11th November 2016.

9-11-2016

ATMs shut down and Banks closed to public.

10-11-2016

ATMs will not work and banks will not be accessible to public  to adjust to the changes made.

10-11-2016

Old Notes can be deposited in banks

30-12-2016

Valid Bank Account or Post Office saving account

10-11-2016

Old Notes can be exchanged for new ones.

24-11-2016

4,500/-amount to be reviewed later

Original Identity Proof with a copy in the form of Aadhaar card, PAN Card, ration card, passport, driver license.  Exchange can be made in all branches of commercial banks/RRBS/UCBs/State Co-op banks or at any Head Post Office or Sub-Post Office and all Issue Offices of RBI

10-11-2016

Money can be withdrawn from ATMs.

18-11-2016

2,000/- per day

10-11-2016

Money can be withdrawn from Banks

10,000/- per day limited to 20,000/- per week

Weekly amount includes amount withdrawn from ATMs.

19-11-2016

Amount that can be withdrawn from ATMs is increased.

4,000/- per day

31-12-2016

Old Notes can be deposited in cases where depositing before 30-12-2016 was not possible.

31-3-2017

ID Proof, Pan & Declaration Form

Foreign Tourists

within 72 hours after the notification

foreign exchange equivalent to Rs. 5,000/-

provide proof of purchasing the old notes

Person not in India

authorize in writing enabling another person in India to deposit the notes

Same as for any Indian

Same as for any Indian

person so authorized has to come to the bank branch with the old notes along with the authorization letter and a valid identity proof

NRIs

Same as for any Indian

Same as for any Indian

deposit the old banknotes to their NRO account.

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 2260294.

You can also contact us on +91 7022251221, 080-40463170 or drop in an email at info@unicomply.com

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2 Comments

  1. Appreciate for sharing such a great blog..

    Reply
    • Thank you dear viewer. Keep coming back and subsribe to stay updated for more.
      Happy Savings! Happy Investing!

      Reply

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