PM Modi bans Rs.500 and Rs.1000 currency notes in India:In a special sudden address to the nation Indian Prime Minister Narendra Modi announced demonetisation of Rs 500 and Rs 1,000 notes with effect from post-midnight on 8 November, 2016, making these notes invalid in a major assault on black money, fake notes and corruption.
PM Modi said the measures were aimed at curbing the “disease” of corruption and black money from nip in the bud. “There is a need for a crucial war against the threat of corruption, black money and terrorism… Corruption, black money and terrorism are festering wounds which make the country hole from within,” he said
Rs 500 & Rs 2000 Currency Would Be Introduced:
As the government made a surprise announcement of making Rs 1,000 and Rs 500 bank notes illegal from midnight, the monetary authority posted a detailed FAQs explaining the rationale behind the move.
The Reserve Bank of India said the most important reason for the ban was the absurd rising of fake currencies to higher denomination, and also the higher incidence of black money in the system, but assured the public that a person could changed his higher value cash with exactly the equal amount in lower denominations.
"You will get value for the entire volume of notes tendered at the bank branches/RBI offices," the central bank ensured the public. But it was quick to add that there will be caps on the cash one can tender.
" The fake notes are used for anti-national and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money. We as a nation remain a cash-based economy, hence the circulation of fake rupees continues to be a menace. To contain the rising incidence of fake notes and black money, the scheme to withdraw high-denomination notes has been introduced," RBI said.
Illustrating the importance of the scheme, the RBI said the legal tender character of the notes in denominations of Rs 500 and Rs 1,000 stands withdrawn. In consequence, the withdrawn old high denomination notes cannot be used for transacting business and/or store of value for future usage.
The old notes can be exchanged at any of the 19 offices of the Reserve Bank, any of the bank branches or at any head post offices or sub-post offices for the value.
For those who need higher amount of cash over and above the permitted Rs 4,000, RBI said one can use balances in bank accounts to pay for other requirements by cheque or through electronic means such as online banking, mobile wallets, IMPS, credit/debit cards etc.
For those without any bank account, RBI said they can open an account with necessary KYV documents.
Even no frill accounts under the Jan Dhan Yojana can also avail of the exchange facility subject to the caps and other laid down limits in accord with norms and procedures
But all the exchanges would process through valid identity proofs of the individuals. This can be done at any branches of the bank that one is banking with and can also be done at other bank branches by providing valid identity proof and bank account details.
A person having no personal account can avail of this exchange facility via a relative/friend's account with written permission. But while exchanging, one should provide the evidence of permission given by the account holder and own valid identity proof.
The exchange can also be done through a third party by a written authorization letter with the bearer, who should have identity proof.
On withdrawals/exchanges through ATMs, the RBI said banks will take time to recalibrate the ATMs. Once the ATMs are functional, one can withdraw upto a Rs 2,000 per card per day up to 18 November. The limit will be raised to Rs 4,000 onwards
Even cash withdrawal through cheque/withdrawal slips is subject to a ceiling of Rs 10,000 in a day within an overall limit of Rs 20,000 in a week (including withdrawals from ATMs) for the first fortnight-up to 24 November.
. Higher value notes can be deposited/withdrawn through ATMs, cash deposit machines and cash recyclers.
1 But electronic transactions (NEFT/RTGS/IMPS/ online banking/mobile banking etc) can be run with no limits.
1 The scheme will be closed on 30 December, 2016 until then one can exchange the banned notes at the branches of commercial banks, regional rural banks, urban cooperative banks, state cooperative banks and special RBI counters. And a limited opportunity will be offered to the person who failed to grab the previous chance at specified offices of the RBI, along with necessary documentation as may be specified by the central bank.
1 Those who are outside the country could have their exchanges by authorising in writing another person in the country to deposit the notes into your bank account with the authority letter and identity proof such as Aadhaar card, driving licence, voter ID card, passport, NREGA card, PAN card etc.
1 Even NRIs can also deposit the banned notes to NRO account. A visiting foreigner can purchase Foreign equivalent to Rs 5,000 using these illegal notes at airport exchange counters within 72 hours after the notification.
1 Till next 72 hours (starting from 8.30 PM on September 8th), Rs 500/1000 notes would still be accepted In case of emergencies at:
– Govt. hospitals
– Medical shops
– Railway booking counters; Bus tickets; Airline counters
– Petrol, CNG outlets run by public sector companies
– Consumer co-operative stores run by Govt.
– Milk booths run by State/Centre Govt.
– Burial grounds and crematoria
PM Modi expressed confidence in bank staffs and post office staffs who rise to the occasion, and ensure smooth transition to all.
Meanwhile, RBI has decided to launch a control room for any sort of confusion. This helpline would be based in Mumbai, and can be accessed at 022 22602201, 22602944 (effective 8 AM, November 9th)
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