FAQs on exchange of old ₹ 500 & ₹ 1000/-notes,and other cash, non-cash transactions in banks

(Things to know about exchange of notes and withdrawal of cash and other transactions at the bank counter.)

Many people still have confusion over how to exchange existing ₹ 500 & ₹ 1000/-notes in their possession and restriction on withdrawal of cash from the account and ATM.  RBI has come out with guidelines on exchange of the Specified Bank Notes (SBN) vide circular No., RBI/2016-17/112/DCM (Plg) No.1226/10.27.00/2016-17 November 08, 2016. In terms of above said circular, the SBN held by a person other than a banking company is allowed to exchange notes at any Issue Office of the Reserve Bank or any branch of public sector banks, private sector banks, foreign banks, Regional Rural Banks, Urban Cooperative Banks and State Cooperative Banks for a period up to and including the 30th December, 2016, subject to the following conditions.

1. Q: Where and how to exchange currency notes of ₹ 500 & ₹ 1000/- ?

Ans.: The specified bank notes (SBN) of aggregate value of ₹ 4,000/- or below may be exchanged for any denomination of bank notes having legal tender character, with a requisition slip in the format specified by the Reserve Bank and proof of identity; the limit of ₹ 4,000/- for exchanging specified bank notes shall be reviewed after fifteen days from the date of commencement of above-mentioned circular..

2. Q: I do not want to exchange the notes but want to credit the amount of SBN proceeds to my account. Is there any limit on the quantity or value of the notes to be tendered?

Ans.: No limit on the quantity or value of the Specified Bank Notes (SBN) tendered for the credit of customer account. However, where compliance with extant Know Your Customer (KYC) norms is not complete in an account, the maximum value of specified bank notes as may be deposited shall be ₹ 50,000/-.

3. Q: Whether I can deposit the SBN at any bank to the credit of my bank account at other places?

Ans.: The equivalent value of specified bank notes tendered may be credited to an account maintained by the tenderer at any bank in accordance with standard banking procedure and on the production of valid proof of Identity.

4. Q: Whether I can deposit the SBN to the third party’s account?

Ans.:   Crediting of  SBN value to third party account specific authorisation is to be given by the account holder. Besides, valid ID proof of the actual tenderer is also taken.

5. Q: Whether I can deposit the SBN to loan account/ term deposit account?

Ans.: Deposits of Specified bank Notes into all types of deposit/loan accounts are allowed subject to CTR/STR reporting.

6. Q: I am in dire need of withdrawing Rs.5 lakh from my account through self cheque. Is there any restriction on withdrawing cash?

Ans.: Cash withdrawal from account through cheque is restricted to Rs.10, 000/- per day (irrespective of the size of the account), subject to an overall ceiling of Rs.20.000/- per week. This ceiling amount includes withdrawals from ATMs as well, from the date of the notification until the end of business hours on 24th November, 2016, after which these limits shall be reviewed. It is clarified that the above limits are not applicable to cash withdrawal from a bank account by one bank from another bank.

7. Q: What is the limit for withdrawing cash from ATM?

Ans.: Withdrawal from ATM is permitted up to a maximum of ₹ 2,000/- per card per day up to 18th Nov, 2016. The limit will be raised to ₹4000/- per day per card from 19th November 2016 onwards.

8. Q: I want to do non-cash transactions like purchase of DD,  issuing cheque to third party etc. Is there any restriction?

Ans.: There is no restriction on you for any non-cash method of operating the account like issuing cheques, purchasing DD, usage of credit or debit cards, mobile wallets and electronic fund transfer mechanisms or the like.

9. Q: Whether old Rs.500/- and Rs.1000/- can be exchanged with a Business Correspondents (BC)?

Ans.: RBI has permitted Business Correspondents (BCs) of banks to exchange Specified Bank Notes up to ₹ 4000/- per person as in the case of bank branches, against valid identity proof and requisition slip. For this purpose banks at their discretion, may enhance the cash holding limits of BCs at least till December 30, 2016.

10. Q: I am presently in USA, unable to exchange or deposit the SBN. Is there any provision to exchange the notes after returning to India at the end of January 2017?

Ans.: Those persons who are unable to exchange or deposit the specified bank notes in their bank accounts on or before the 30th December, 2016, on various reasons are given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by it.

11. Q: What is the limit for crediting the value of SBN to Jan Dhan Yojana Accounts?

Ans.: While crediting the value of Specified Bank Notes to Jan Dhan Yojana Accounts, the usual limits will apply mutatis mutandis.

12. Q: How Non-Residents can exchange the Specified Bank Notes?

Ans.: It is given to understand that the Indian Bank branches situated abroad are not accepting the specified bank notes banned by GOI either for exchaange or to the credit of NRO accounts in India.Normally the RBI should provide an option, but nothing has come out so far. As per present notification of RBI public can exchange or deposit the notes to their account till December 30, 2016 and even beyond, at specified RBI offices. Since ours is overwhelmingly cash-based economy, the task may not be completed within the deadline.The dates may be extended depending upon the situation. Therefore best option for NRIs is to travel back to India to exchange the specified notes in person.In case it is not possible for them to visit the branch they may send their representative with an express mandate i.e. a written authorisation to deposit the value of the proceeds to their NRO account.

Note:The Non-Resident Indian cannot carry more than Rs.25000/- in or out of India.The resident Indians while returning from temporary foreign visits (other than Nepal and Bhutan), can bring back Indian currency notes up to Rs.25000/-. The Non-Resident Indians or foreigners (not being a citizen of Pakistan and Bangladesh) entering India through an airport can bring an amount up to Indian Rupees 25,000/-. The travellers who are residents of India, who had gone to Pakistan or Bangladesh on a temporary visit, may bring back Indian Rupees up to Rs.10000/- per person.

13. Q: I got some pre-2005 notes of Rs.1000/- and Rs.500/-.Whether I can exchange or deposit those notes in the banks?

Ans.: The pre-2005 notes shall be accepted at the counter of the branches both for exchange and deposit.

14. Q: Can I exchange ₹ 2000 more than once?

Ans.: As per extant guidelines of RBI, banks are exchanging defunct notes of Rs.500/- and Rs.1000/- up to ₹ 2000 only once. The banks, post offices, RBI issue offices put indelible ink mark on the right index finger of the customer so as to identify the persons who have already exchanged old notes.

15. Q:What are the valid identity proof?
Ans.: A 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).

For further clarification, readers  may contact the control room of RBI by on Telephone Nos 022 22602201/022 22602944

Update: In its announcement of November 17, 2016, the government allowed up to Rs 2.5 lakh cash withdrawal from bank for the purpose of marriage celebrations. In an another move, the exchange limit lowered to Rs.2000/- from Rs.4500/-. Further, in a breather for farmers across the country ahead of the onset of Rabi season, the government permitted farmers to withdraw up to Rs.25000/- per week from the payment received by Cheque, RTGS etc.Time limit for payment of crop insurance renewal is also extended by 15 days. In addition to the above, finance ministry informed that registered traders at mandis will be allowed to withdraw Rs.50000/- per week to meet labour cost. However, all the accounts of farmers and traders must be KYC complainant.
The central government employees, up to group C, can draw their salary in advance up to Rs 10,000 in cash. This will be adjusted against their November salaries.