Government of India vide their Notification dated November 8, 2016 have withdrawn the Legal Tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank till 8th November 2016.
The communique states that the above step was necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.
Starting from 10th November 2016, members of public/ corporates, business firms, societies, trusts etc holding these notes can tender them at any office of the Reserve Bank or any bank branch and obtain value thereof by credit into their respective bank accounts.
General public for their immediate cash needs, may exchange these notes of value upto ₹ 4,000 per person over the counter of the bank branches.However, public are advised to present a valid proof of identity for availing this exchange facility.
The value credited to their bank accounts can be freely used by issue of cheques or by remitting through various electronic modes of transfer like NEFT, RTGS, IMPS, mobile banking, internet banking etc. Cash withdrawals from bank accounts, over the bank counters, will be restricted to a limited amount of ₹ 10,000 per week.
All ATMs and other cash machines will remain shut on 9th November 2016 to facilitate recalibration. When ready, they will be reactivated and cash drawals from ATM and other machines will be restricted to ₹ 2,000 per day.
