09 November 2016 Current Affairs: The Reserve Bank of India (RBI) has notified withdrawal of legal tender of 500 and 1000 rupees denominations of Bank Notes of the existing series issued by RBI with effect from 9 November 2016.
The withdrawal came following the Gazette Notification No 2652 dated 8 November 2016 issued by Union Government.
However, a new series of Bank Notes called Mahatma Gandhi (New) Series having different size and design, highlighting the cultural heritage and scientific achievements of the country, will be issued.
Bank branches will be the primary agencies through which the members of public and other entities will be exchanging the Specified Bank Notes for Bank Notes in other valid denominations or depositing the Specified Bank Notes for crediting to their accounts till 30 December 2016.
In order to enable the members of public and other entities to exchange their existing 500 and 1000 rupees notes, the following arrangements will be made by the banks:
9 November 2016 will be a non-business working day for all banks. However, branches will function on that day to carry out preparations for implementing the scheme as per this circular.
The Specified Bank Notes stocked in ATMs, Cash Deposit Machines, Cash Recyclers, Coin Vending Machines, CIT Companies and Business Correspondents will be called back forthwith.
All ATMs, Cash Deposit Machines, Cash Recyclers and any other machine used for receipt and payment of cash shall be shut on 9 and 10 November 2016.
All ATMs and cash dispensing machines will be re-configured to disburse bank notes of 100 and 50 rupees denominations prior to reactivation of the machines on 11 November 2016.
Every banking company defined under the Banking Regulation Act, 1949 shall complete and forward a return showing the details of the Specified Bank Notes held by it at the close of business as on 8 November 2016 to the concerned Regional Office of RBI.
The return should include details of Specified Bank Notes recalled from ATMs, Cash Deposit Machines, Cash Recyclers, Coin Vending Machines, CIT Companies, Business Correspondents, etc.
Arrangement will be made by the branches to promptly deposit these Specified Bank Notes with the linked RBI and get the amount credited to their account.
Cash Deposits machines should continue to accept Specified Bank Notes up to 30 December 2016.
Information Material, for educating the public regarding withdrawal of Legal Tender character of the Specified Bank Notes and salient features of the Mahatma Gandhi (New) Series Bank Notes, is required to be printed in adequate quantity and distributed to the public.
Banks should identify the staff for managing the exchange counters and brief them properly about the scheme and the procedure to be followed.
Banks should provide adequate number of note counting machines, UV Lamps, note sorting machines etc. at their counters to take care of the work load and timely detection of counterfeit notes.
Bank branches will commence normal operations on 10 November 2016.
Banks have to accord top priority to provide facility for exchanging deposits of Specified Bank Notes and open additional counters to meet the public demand and keep the counters open for extended ours.
The specified bank notes of aggregate value of 4000 rupees or below may be exchanged for any denomination of bank notes having legal tender character, with a requisition slip in the format specified by RBI and identity proof.
There shall not be any limit on the quantity or value of the specified bank notes to be credited to the account maintained with the bank by a person.
Cash withdrawal from a bank account over the counter will be restricted to 10000 rupees per day subject to an overall limit of 20000 rupees a week from the date of the notification until the end of business hours on 24 November 2016, after which these limits will be reviewed.
There shall be no restriction on the use of any non-cash method of operating the account of a person including cheques, demand drafts, credit or debit cards, mobile wallets and electronic fund transfer.
Withdrawal from ATMs will be restricted to 2000 rupees per day per card up to 18 November 2016 and the limit will be raised to 4000 rupees per day per card from 19 November 2016.
Any person who is unable to exchange or deposit the specified bank notes in their bank accounts on or before the 30 December 2016 shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by it.
While crediting the value of Specified Bank Notes to Jan Dhan Yojna Accounts, the usual limits will apply mutatis mutandis.