Here’s how RBI changed, reworked demonetisation guidelines

With the infusion of new currency, RBI changed rules for withdrawal, exchange and deposit of cash several times.

By: Express Web Desk | Delhi | Updated: December 19, 2016 12:57 pm
rbi, rbi guideline, rbi withdrawal guidelines, rbi news, india news, demonetisation, caash, cash withdrawal, cash withdrawal limit, india cash withdrawal limit, india news RBI Governor Urjit Patel speaks during a news conference after the bimonthly monetary policy review in Mumbai, India December 7, 2016. (Source: Reuters)

The Reserve Bank of India had been preparing for the roll-out of demonetisation policy six months before Prime Minister Narendra Modi announced it on November 8. But the implementation of the policy has not been smooth, with banks failing to meet the demand for cash in new currency. With the infusion of new currency, RBI changed rules for withdrawal, exchange and deposit of cash several times. In days that followed the roll-out of new currency notes on November 10, Economic Affairs Secretary Shaktikanta Das held several press conferences thereafter to announce new rules.

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Here’s a look at how the RBI guidelines changed in the past one month:

November 08, 2016/2016-2017/1142: Government of India vide their Notification no. 2652 dated November 8, 2016 have withdrawn the Legal Tender status of Rs 500 and Rs 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016. This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.

For their immediate cash needs, these notes of value up to ` 4,000 per person can be exchanged for cash over the counter of these bank branches. Cash withdrawals from bank accounts, over the bank counters, will be restricted to a limited amount of ` 10,000 per day subject to an overall limit of ` 20,000 a week from November 9, 2016 till end of business on November 24, 2016.

Demonetisation, demonetisation effects, demonetisation deaths, bank queues, bank deaths, west bengal, west bengal demonetisation, currency demonetisation, narendra modi, PM modi, india news, indian express news People queue outside a bank to withdraw cash and deposit their old high denomination banknotes in Kolkata, India November 30, 2016. (Source: Reuters)

All ATMs and other cash machines will remain shut on November 9, 2016 to facilitate recalibration. When ready, they will be reactivated and cash drawals from ATMs will be restricted to ` 2,000 per day per card up to November 18, 2016 and the limits shall be raised to ` 4000 per day per card from November 19, 2016.

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November 08, 2016/2016-2017/1143: All scheduled and non-scheduled banks, including public, private, foreign, cooperative, regional rural and local area banks, will remain closed for public on Wednesday, November 9, 2016.

November 08, 2016/2016-2017/1145: The Reserve Bank of India will shortly issue ` 2000 denomination banknotes in the Mahatma Gandhi (New) Series, with the inset letter ‘R’, bearing signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India, and the year of printing ‘2016’ printed on the reverse of the banknote.

November 08, 2016/2016-2017/1146: The Reserve Bank of India will shortly issue ` 500 denomination banknotes in Mahatma Gandhi (New) Series with inset letter ‘E’ in both the number panels, bearing the signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India, the year of printing ‘2016’ and Swachh Bharat Logo printed on the reverse of the Banknote.

November 09, 2016/2016-2017/1161: All scheduled and non-scheduled banks, including public, private, foreign, cooperative, regional rural and local area banks, will remain open for public on Saturday, November 12 and Sunday, November 13, 2016. Banks are advised to keep all their branches open on November 12 and 13, 2016 as regular working days for transacting all business. Banks may give due publicity about availability of banking services on these days.

kerala, kerala pay day, pay day demonetisation, demonetisation pay day, demonetisation salaries, pension and salary lines, kerala pensioners, kerala govt employees, demonetisation problems, india newsNov 10, 2016/2016-2017/1164: Consequent to the banks being open for public transactions on Saturday, November 12 and Sunday, November 13, 2016, it has been decided that Payment Systems (RTGS, NEFT, Cheque Clearing, Repo, CBLO and Call markets) shall remain open on Saturday, November 12 and Sunday, November 13, 2016. All participants/member banks are advised to facilitate operations on the above payment systems for their customers on November 12 and 13, 2016 as on regular working days. Banks may give due publicity about availability of above payment system services on these days.

November 11, 2016/2016-2017/1182: The Reserve Bank of India has said that consequent to the withdrawal of Legal Tender Character of existing Rs 500 and Rs 1000 Bank Notes, it has made arrangements to distribute the notes in new Rs 2000 and other denominations across the country.

There is enough cash available with banks and all arrangements have been made to reach the currency notes all over the country. Bank branches have already started exchanging notes since November 10, 2016. As mentioned in RBI communications, it may take a while for the banks to recalibrate their ATMs; once the ATMs are functional, members of public will be able to withdraw from ATMs upto a maximum of Rs 2,000 per card per day up to November 18, 2016; and after that withdraw up to Rs 4000 per day per card. The facility for exchanging the withdrawn denominations of Rs 500 and Rs 1000 is available for nearly 50 days. The Reserve Bank appeals to members of public to be patient and urges them to exchange their old notes at their convenience, any time before December 30, 2016.

November 12, 2016/2016-2017/1189: The Reserve Bank of India today clarified that as part of the instructions issued to banks, including to cooperative banks, regarding withdrawal of legal tender status of the existing Rs 500 and Rs 1000 bank notes (specified bank notes), detailed reporting system has been put in place. The Reserve Bank further stated that with a view to preventing misuse of the facility, the authorities are closely monitoring the information received through these reports about exchange and deposits of the specified bank notes by the public with the banks, including cooperative banks.

November 12, 2016/2016-2017/1190: Keeping in mind the need for other denomination notes which are legal tender (including Rs 2000), adequate stocks of these notes are kept ready in the Currency Chests located at more than 4,000 places across the country. Bank branches are linked to them to source their requirements from them. To sustain the demand, Printing Presses are printing the currency notes at full capacity so that adequate quantum of notes is available.

While these efforts are afoot, public are encouraged to switch over to alternative modes of payment, such as pre-paid cards, Rupay/Credit/Debit cards, mobile banking, internet banking. All those for whom banking accounts under Jan Dhan Yojana are opened and cards are issued are urged to put them to use. Such usage will alleviate the pressure on the physical currency and also enhance the experience of living in the digital world.

November 13, 2016/2016-2017/1194: The Reserve Bank assures members of the public that enough cash in small denominations is also available at the Reserve Bank and banks. The Reserve Bank urges that public need not be anxious; need not come over to banks repeatedly to draw and hoard; Cash is available when they need it.

mumbai-cash-rush-759November 13, 2016/2016-2017/1196: The Reserve Bank of India will shortly issue Rs 500 denomination banknotes in Mahatma Gandhi (New) Series with inset letter ‘L’ in both the number panels, bearing the signature of Dr. Urjit R. Patel, Governor, Reserve Bank of India, the year of printing ‘2016’ and Swachh Bharat Logo printed on the reverse of the Banknote.

November 14, 2016/2016-2017/1197: Constitution of Task Force for enabling dispensation of Mahatma Gandhi (New) Series Banknotes – Recalibration and reactivation of ATMs. It has become necessary to re-calibrate all ATMs/ Cash handling machines to dispense the new design notes following introduction of Mahatma Gandhi (New) Series Banknotes including a new High Denomination (Rs 2000) in new designs. Re-calibration of ATMs involves multiple agencies – banks, ATM manufacturers, National Payment Corporation of India (NPCI), Switch Operators, etc., and multiple activities making it a complex operation requiring immense coordination among these agencies. With a view to providing direction and guidance in this regard, it has been decided to set up a Task Force under the Chairmanship of Shri S. S. Mundra, Deputy Governor, Reserve Bank of India.

November 14, 2016/2016-2017/1198: The Reserve Bank of India has today clarified that District Central Cooperative Banks (DCCBs) can allow their existing customers to withdraw money from their accounts upto Rs 24,000 per week upto November 24, 2016. However, no exchange facility against the specified bank notes (Rs 500 and Rs 1000) or deposit of such notes should be entertained by them. The Reserve Bank has accordingly advised all banks to permit withdrawal of cash by DCCBs from their accounts based on need. The cash withdrawal limit of Rs 24,000 per week is not applicable to withdrawal of cash by a DCCB from its account with any other bank.

November 14, 2016/2016-2017/1199: The Reserve Bank of India has today decided that banks shall waive levy of ATM charges for all transactions (inclusive of both financial and non-financial transactions) by savings bank customers done at their own banks’ ATMs as well as at other banks’ ATMs, irrespective of the number of transactions during the month. The above waiver of charges on ATM usage will be effective from November 10, 2016 till December 30, 2016, subject to review.

November 15, 2016/2016-2017/1215: There were reports that some cooperative banks were not strictly adhering to the instructions issued in connection with the withdrawal of legal tender status of the existing Rs 500 and Rs 1000 bank notes (specified bank notes). The Reserve Bank of India today informed that it has advised the Urban Cooperative Banks through its Regional Offices and the State Cooperative Banks through National Bank for Agricultural and Rural Development (NABARD) of the need to ensure strict compliance with the instructions issued with regard to exchange of specified bank notes as also deposit of such notes into the accounts of their customers.

November 17, 2016/2016-2017/1235: The Reserve Bank of India has once again clarified today that there is sufficient supply of notes consequent upon increased production which started nearly two months ago. Members of public are requested not to panic or hoard currency notes.

November 18, 2016/2016-2017/1255: The Reserve Bank of India had issued instructions to banks on November 14, 2016 that banks shall waive levy of ATM charges for all transactions by saving bank customers done at all ATMs, irrespective of the number of transactions during the month, from November 10, 2016 till December 30, 2016, subject to review. As another customer-centric measure, the limit for cash withdrawal at POS has been made uniform at to Rs 2000/- per day across all centres (Tier I to VI) for all merchant establishments enabled for this facility and (ii) customer charges, if any, being levied on all such transactions waived till December 30, 2016, subject to review.

November 21, 2016/2016-2017/1265: Consequent to the announcement of withdrawal of Legal Tender status of banknotes of Rs 500 and Rs 1000 denominations from the midnight of November 8, 2016, the Reserve Bank of India made arrangements for exchange and /or deposit of such notes at the counters of the Reserve Bank and commercial banks, Regional Rural banks and Urban Cooperative Banks.
Banks have since reported that such exchange/deposits effected from November 10, 2016 upto November 18, 2016 amounted to Rs 5,44,571 crore (exchange amounted to Rs 33,006 crore and deposits amounted to Rs 5,11,565 crore). They have also reported that the public have withdrawn, during this period, Rs 1,03,316 crore from their accounts either over the counter or through ATMs.

November 22, 2016/2016-2017/1282: In order to meet the transactional needs of the public through digital means, the Reserve Bank has introduced additional measures by way of special dispensation for small merchants and enhancement in limits for semi-closed Prepaid Payment Instruments (PPIs).

A special dispensation has now been enabled for small merchants whereby PPIs issuers can issue PPIs to such merchants. While balance in such PPIs cannot exceed Rs 20,000/- at any point of time, the merchants can transfer funds from such PPIs to their own linked bank accounts upto Rs 50,000/- per month, without any limit per transaction. Merchants only need to provide a self-declaration in respect of their status and details of their bank account.

The limit of semi-closed PPIs issued with minimum details has been enhanced to Rs 20,000/- from the existing Rs 10,000/-. The total value of reloads during any given month has also been enhanced to Rs 20,000/-.

Extant instructions for other categories of PPIs remain unchanged. Full KYC PPIs with balance upto Rs 1,00,000/- can continue to be made available by authorised PPI issuers.

The above measures will be effective from November 21, 2016 till December 30, 2016, subject to review.

The earlier PPI guidelines did not specifically provide for opening of PPIs for such merchants as a separate category and the limit for semi-closed PPIs issued with minimum details was Rs 10,000/-.

November 22, 2016/2016-2017/1283: The facility for public to exchange the specified bank notes (old notes in Rs 500 and Rs 1000) for legal tender notes and allowing them to deposit into bank accounts in unlimited amounts is provided to enable members of the public in possession of these notes as on the date of the announcement to secure the value of these notes either through exchange or by deposit into their bank accounts.

It is reported that certain gullible persons are exchanging these notes on behalf of other; some are even helping them by depositing the hoarded cash into their own bank accounts. Even Pradhan Mantri Jan Dhan Yojana accounts are being put to use for this.

Members of public are cautioned that exchanging /dealing in Specified bank notes in unauthorised manner is illegal and liable to strict punitive action.

November 25, 2016/2016-2017/1317: The Reserve Bank of India advises members of public that exchange of banknotes in Rs 500 and Rs 1000 denominations, whose legal tender status has been withdrawn, will continue to be available at the counters of the Reserve Bank upto the current limits per person as hitherto. (However such exchange facility is no longer available at other banks’ counters).

November 28, 2016/2016-2017/1349: Consequent to the announcement of withdrawal of legal tender status of banknotes of Rs 500 and Rs 1000 denominations from the midnight of November 8, 2016, the Reserve Bank of India made arrangements for exchange and/or deposit of such notes at the counters of the Reserve Bank and commercial banks, Regional Rural banks and Urban Cooperative Banks.

Banks have since reported that such exchange/deposits effected from November 10, 2016 upto November 27, 2016 amounted to Rs 8,44,982 crore (exchange amounted to Rs 33,948 crore and deposits amounted to Rs 8,11,033 crore).

They have also reported that the public have withdrawn, during this period, Rs 2,16,617 crore from their accounts either over the counter or through ATMs.

December 01, 2016/2016-2017/1382: It has been reported that certain guidelines/instructions purported to be issued by the Reserve Bank are being circulated in the social media by some unscrupulous elements creating confusion in the minds of the public/bank personnel.

Banks and members of the public are, therefore, cautioned to be guided by only those instructions which are either uploaded on the Reserve Bank’s official website or received through the Reserve Bank’s official mail.

The banks and members of the public are advised that they should not rely on other unsecured/ unofficial channels like social media in which the authenticity of the documents circulated is questionable and not verifiable.

December 19, 2016/2016-2017/1859: The Reserve Bank has notified that tenders of SBNs in excess of Rs 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. For amounts exceeding Rs 5000 in old Rs 500 and Rs 1000 notes, they can now be deposited only once per bank account. The limit for withdrawals has remained unchanged at Rs 24,000 per week.

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