It’s more than 3 weeks since the government announced the withdrawal of the old Rs 500 and Rs 1000 notes. Here is an update on the issue with all the changes effected in the last few days.

New Deposit Rules (with effect from 19th December 2016)

The old notes in excess of Rs 5000 into a bank account will be received for credit only once during the remaining period till December 30, 2016. The credit in such cases shall be afforded only after questioning the depositor, on record, in the presence of at least two officials of the bank, as to why this could not be deposited earlier and receiving a satisfactory explanation. The explanation should be kept on record to facilitate an audit trail at a later stage. An appropriate flag also should be raised to that effect so that no more such deposits are allowed. Old notes of up to Rs 5000 in value received across the counter will allowed to be credited to bank accounts in the normal course until December 30, 2016. Even when deposits smaller than Rs 5000 are made in an account and such deposits taken together on cumulative basis exceed Rs 5000, they may be subject to the procedure to be followed in case of deposits above Rs 5000, with no more deposits being allowed thereafter until December 30, 2016. It should also be ensured that full value of deposits of old notes in excess of Rs 5000 shall be credited to only KYC compliant accounts and if the accounts are not KYC compliant credits may be restricted up to Rs 50,000 subject to the conditions governing the conduct of such accounts. The above restrictions shall not apply to tenders of old notes for the purpose of deposits under the Taxation and Investment Regime for the Pradhan Mantri Garib Kalyan Yojana, 2016. The equivalent value of old notes deposited may be credited to an account maintained by the depositor at any bank in accordance with standard banking procedure and on production of valid proof of Identity. The equivalent value of old notes deposited may be credited to a third party account, provided specific authorisation accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually depositing, as indicated in Annex-5.

Quoting of PAN is mandatory in the following transactions

Deposit with a bank in cash exceeding Rs 50,000 in a single day. Purchase of bank drafts or pay orders or banker’s cheques from a bank in cash for an amount exceeding Rs 50,000 in a single day. A time deposit with a Bank or a Post Office. Cash deposits aggregating to Rs 2,50,000 or more during the period 09th November, 2016 to 30th December, 2016.

Exchanges

The over the counter exchange facility has been discontinued from the midnight of 24th November, 2016 at all banks. The exchange of the old Rs 500 and Rs 1000 notes will continue to be available at the counters of the Reserve Bank up to the current limits of Rs 2000 per person. Foreign citizens will be permitted to exchange foreign currency up to Rs. 5000 per week. Necessary entry to this effect will be made in their passports. This will be applicable up to 15th December 2016. The limit has been decreased from the existing Rs 4,500 to Rs 2,000. The reduced limit will be applicable from 18th November, 2016. Separate queues will be arranged for Senior Citizens and Divyang persons, customers with accounts in the Bank and for customers for exchange of notes.

Cash Withdrawal at Bank Branches

The weekly limit of Rs 20,000 for withdrawal from Bank accounts has been increased to Rs 24,000. The limit of Rs 10,000 per day has been removed. RBI has issued a notification to allow withdrawals of deposits made in the valid notes (including the new notes) on or after November 29, 2016 beyond the current limits. The notification states that available higher denominations bank notes of ₹ 2000 and ₹ 500 are to be issued for such withdrawals as far as possible. But no higher limit has been set for such withdrawals. It is also unclear if this facility will be available to only those who make deposits with the valid notes. Business entities having Current Accounts which are operational for last three months or more will be allowed to draw Rs 50,000 per week. This can be done in a single transaction or multiple transactions. District Central Cooperative Banks (DCCBs) will also facilitate withdrawals with the same limits as normal banks. Restrictions on PMJDY accounts: Fully KYC compliant account holders will be allowed to withdraw Rs 10,000 from their account, in a month. The branch managers may allow further withdrawals beyond this limit within the current applicable limits only after ascertaining the genuineness of such withdrawals and duly documenting the same on bank’s record. Limited or Non KYC compliant account holders will be allowed to withdraw Rs 5,000 per month within the overall ceiling of Rs 10,000.

ATM Withdrawals

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