Updated FAQs on cash withdrawal-exchange of Bank Notes by RBI dated 09-02-2017. Effective March 13, 2017, there will be no limits on cash withdrawals from Savings Bank accounts.
Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- and The Specified Bank Notes (Cessation of Liabilities) Ordinance 2016
(Updated as on February 09, 2017)
1. Why was the Scheme of Withdrawal of Legal Tender Character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- 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 legal tender character of the old Bank Notes in the denominations of ₹ 500/- and ₹ 1000/-was introduced
2. What is this scheme?
The legal tender character of the 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1000 issued by the Reserve bank of India till November 8, 2016 (hereinafter referred to as Specified Bank Notes) stands withdrawn.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 (SBNs) were allowed to be exchanged for value at RBI Offices till December 30, 2016 and till November 25, 2016 at bank branches/Post Offices and deposited at any of the bank branches of commercial banks/ Regional Rural Banks/ Co-operative banks (only Urban Co-operative Banks and State Co-operative Banks) or at any Head Post Office or Sub-Post Office during the period from November 10, 2016 to December 30, 2016.
The facility for exchange / deposit of SBNs stands closed with effect from December 31, 2016
3. What is the Specified Bank Notes (Cessation of Liabilities) Ordinance 2016?
The Specified Bank Notes (Cessation of Liabilities) Ordinance 2016 has been promulgated by the President of India (GoI Ordinance No. 10 of 2016 dated December 30, 2016) to provide for cessation of liabilities on the Specified Banknotes and for connected/incidental matters and comes into effect from December 31, 2016. In terms of this ordinance, with effect from December 31, 2016, the specified banknotes shall cease to be the liabilities of Reserve Bank of India and shall cease to have the guarantee of the Central Government.
A grace period has been provided during which the specified banknotes can be deposited at five RBI Offices (Mumbai, New Delhi, Chennai, Kolkata, and Nagpur) in accordance with this Ordinance by Indian citizens who make a declaration that they were outside India between November 9 and December 30, 2016, subject to conditions or any class of persons for reasons that may be specified by notification by the Central Government.
For details on the exchange counter timings at the five aforesaid Regional Offices of RBI, please click here.
Reserve Bank, if satisfied after making the necessary verifications, that the reasons for failure to deposit the notes till December 30, 2016 are genuine –will credit the value of notes in the KYC (Know Your Customer ) compliant bank account of the tenderer.
Holding the specified banknotes (SBNs) for the purpose of deposit by Resident Indian citizens who were abroad during November 9, 2016 to December 30, 2016 and Non Resident Indian citizens who were abroad during November 9, 2016 to December 30, 2016 is permissible during grace period. With effect from January 2, 2017 Resident Indian citizens who were abroad during November 9, 2016 to December 30, 2016 can avail this facility upto March 31, 2017 and Non Resident Indian citizens who were abroad during November 9, 2016 to December 30, 2016 can avail this facility upto June 30, 2017. While there is no monetary limit for exchange for the eligible Resident Indians, the limit for NRIs will be as per the relevant FEMA Regulations. In terms of Section 6 of the Ordinance, whoever knowingly or wilfully makes any false declaration shall be punishable with a fine which may extend to 50,000 INR or five times the amount of the face value of the SBNs tendered whichever is higher. Any person aggrieved by the refusal of Reserve Bank to credit the value of notes as mentioned above may make a representation to the Central Board of the Reserve Bank within 14 days of the communication of such refusal to him/her.
In terms of Section 5 of the Ordinance, from December 31, 2016 no person shall knowingly or voluntarily hold , transfer or receive any specified banknotes. After the expiry of grace period, holding of not more than 10 notes in total, irrespective of denomination or not more than 25 notes for the purpose of study/ research/ numismatics is permitted. In terms of Section 7, contravention of Section 5 shall be punishable with fine which may extend upto 10,000 INR or five times the face value of the SBNs involved in the contravention, whichever is higher.
In case the contravention/default in terms of Sections 6 and 7 is by a company, every person who was in charge of and responsible to the company at the time of contravention/ default shall deemed to be guilty and will be liable to be proceeded against and punished. If the offence is proved to be attributable to the conduct by any director/manager/ secretary/ officer/ employee of the company, such person shall also be deemed to be guilty of the offence and will be liable to be proceeded against and punished accordingly.
4. How can NRIs and the Indian citizens who were abroad exchange the SBNs?
In terms of Paragraph 4.1 of the GoI Ordinance No. 10 of 2016 dated December 31, 2016 on “The Specified Bank Notes (Cessation of Liabilities), a facility for exchange of SBNs is made available for the resident and non-resident citizens who could not avail the facility from November 10 to December 30, 2016 on account of their absence from India during the aforementioned period. The facility will remain open for residents from January 2, 2017 to March 31, 2017 and for NRIs from January 2, 2017 to June 30, 2017 at five Reserve Bank offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur.
The facility can be availed only in individual capacity and only on one occasion during the period. No third party tender is permissible under the facility.
This facility will not be available for Indian citizens resident in Nepal, Bhutan, Pakistan and Bangladesh.
The details of the facility including terms/ conditions and modalities thereof are available in our circular DCM (Plg) No 2170/10.27.00/2016-17 dated December 31, 2016.
5. Is the facility for exchange of SBNs by NRIs available outside India?
No. For NRIs the facility is available from January 2, 2017 to June 30, 2017 at five Reserve Bank offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur. The limit of exchange for NRIs will be as per the relevant FEMA Regulations.
6. Is the facility available to Overseas Citizens of India (OCI)/Persons of Indian Origin (PIO)?
No, the facility is not available to OCIs/PIOs.
7. Is the facility available to resident Indians?
No, the facility is not available to all resident Indians, but only to those who were not in India during the period November 9, 2016 to December 30, 2016.
8. How much amount can I withdraw from an ATM?
With effect from February 1, 2017 limits on cash withdrawals from ATMs have been removed. Banks may, at their discretion, have their own operating limits as was the case before November 8, 2016, subject to the overall cash withdrawal limit for an account.
9. What are the cash withdrawal limits for accounts?
It has been decided to remove the restrictions on cash withdrawals from Saving Bank accounts in a two step process as under:
- Effective February 20, 2017, the limits on cash withdrawals from the Savings Bank accounts will be enhanced to ₹ 50,000 per week (from the current limit of ₹ 24,000 per week); and
- Effective March 13, 2017, there will be no limits on cash withdrawals from Savings Bank accounts.
Cash withdrawal limits for Current accounts/ Cash credit accounts/ Overdraft accounts stand withdrawn with effect from January 30, 2017.
10. Does the cash withdrawal limit for a savings bank account 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.
11. Can I withdraw cash against cheque?
Yes, you can withdraw cash against withdrawal slip or cheque subject to applicable cash withdrawal limit (including withdrawals from ATMs and over the counter) from the bank accounts
12. 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. In order to meet the transactional needs of the public through digital means, additional measures have been introduced by way of special dispensation for small merchants and enhancement in limits for semi-closed Prepaid Payment Instruments (PPIs).
13. What is being done for the farmers?
Farmers are allowed to draw upto ₹ 25,000 per week in cash from their loan or deposit accounts subject to their accounts being compliant with the extant KYC norms. Effective February 20, 2017, the limits on cash withdrawals from the Savings Bank accounts will be enhanced to ₹ 50,000 per week (from the current limit of ₹ 24,000 per week); and
Effective March 13, 2017, there will be no limits on cash withdrawals from Savings Bank accounts.
Towards ensuring unhindered farming operations during the Rabi crop season, NABARD would be utilizing its own cash credit limits up to about ₹ 23,000 crore to enable the DCCBs to disburse the required crop loans to PACS and farmers. Banks with currency chests have been advised to ensure adequate cash supply to the DCCBs and RRBs. Adequate cash supply should also be ensured for rural branches of all commercial (including RRBs). Bank branches located in APMCs may also be given adequate cash to facilitate smooth procurement.
14. 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