On 8th November,2016 at 8 p.m. came a historic move that took the whole of India by surprise. The announcement that old currency notes of the denomination of Rs.500 and Rs.1000 shall be abolished from 9th November,2016 onwards…a bold step by the Government.
The Government has given a time period of 50 days starting from 10th November to 30th December,2016 to exchange or deposit your old currency notes of Rs.500 and Rs.1000.
As quoted by few experts, this was a masterstroke played by Prime Minister Narendra Modi to curb black money,fake currency issues in the country and above all a fight against terrorism.
People are calling it by different names,“Surgical strike against black money” or “A massive step to reduce terrorism in the country”.
But,as usual whenever a new reform or a new policy is implemented, it is most likely to have its impact on the common man.
This has created a situation of panic amongst the common man,the normal life of people has been affected since the past few days.But,slowly and gradually when new currency shall be fully in circulation, things shall be back to normal again.
However,looking at the long queues at Banks and ATMs in the past few days, we might have to wait for a bit longer to regain our normal situation.
So,Rs.500 and Rs.1000 old currency notes banned, are you looking for a change ? Keeping reading further to know all the details about what is happening around you…
Exchange or Deposit Rs.500 or Rs.1000 currency notes :
Here are 10 points to be kept in mind while exchanging or depositing your money in banks or post offices.
1. Withdrawal limit from Banks :
The withdrawal limit that was earlier fixed at Rs.20000 per week has been increased to Rs.24000 per week. So,now you can withdraw a total amount of Rs.24000 in a particular week from banks.
Farmers can withdraw Rs.25000 per week from their bank accounts.Business entities can withdraw a maximum of Rs.50000 per week from their current accounts in a single or through multiple transactions.
There is some relief for those who have weddings,now you are allowed to withdraw upto a maximum of Rs.2.5 lakhs from your account.
2. Withdrawal limit from ATMs :
The maximum withdrawal limit from ATMs was fixed at Rs.2000 per withdrawal. The ATMs are being recaliberated, and in such ATMs the limit shall be increased to Rs.2500 per withdrawal.The withdrawal limits shall be enhanced further in the days to come based on the supply of new currency at ATMs.
Rest it is all based upon the availability of cash in the ATMs and how lucky you are to withdraw the money standing in long queues.
3. Limit for exchange of old Rs.500 and Rs.1000 currency notes :
This limit was earlier fixed at Rs.4000. But,now you can exchange the old currency notes upto a maximum of Rs.4500 till 24th of November,2016 midnight (earlier this was till 14th November,2016).
From 18th November,2016 the exchange limit for old currency notes has been reduced to Rs.2000 only.
Since,the past few days it was observed that same people were coming again and again to exchange notes at different banks.In order to avoid this,in a recent update, the banks have been authorised to put an indelible ink mark on your hand,so that one person can exchange currency only once during the said period.
Important Note : From 25th November,2016 : The over the counter exchange of old currency notes has been stopped.Now,you can only deposit the old currency notes in banks.
4. Use of Old notes at few places :
In order to reduce the chaos amongst people,the Government has extended the use of currency notes in few transactions till 24th November,2016.So,you could make use of your old Rs.500 and Rs.1000 currency notes at few authorised places only.
Important Note : Earlier both old currency notes of Rs.500 and Rs.1000 were allowed to be used at below mentioned places.But,from 25th November,2016 onwards only Rs.500 notes shall be accepted at these places till 15th December 2016.The only option left for Rs.1000 notes is to deposit them in banks.
Some of the major places to use old Rs.500 currency notes are :
- Government hospitals and pharmacies.
- Petrol,diesel and Gas stations
- Airline ticket counters
- Rail ticketing
- Bus tickets of Government buses
- LPG refills
- Electricity and water bills
- Milk booths authorised by State Governments.
- Consumer co-operative stores run by Government etc.
Kindly note that in a latest update even Rs.500 old currency notes are also not acceptable at some of the above mentioned places like Petrol,diesel,gas stations,airline,rail tickets etc.
5. Cash Deposits upto Rs.2.5 lakhs :
The Government has assured that the innocent shall not be questioned. The common man making cash deposits upto Rs.2.5 lakhs and from genuine sources shall not be answerable.So,people saving small amounts in the form of cash like housewives,senior citizens or any other person need not worry if the same is through correct means.
It is no fun keeping excess cash with you, invest your money in the right manner or we should say invest your hard earned money wisely to reap good benefits in the long run.
6. Cash Deposits above Rs.2.5 lakhs :
All the cash deposits above Rs.2.5 lakhs made during the period from 9th November to 30th December,2016 shall be checked. In case of any mismatch, the same shall be treated as Tax evasion.
In case of tax evasion i.e. where the cash deposits are not justifiable, tax plus a penalty of 200% shall be imposed.
7. Exchange of notes after 30th December,2016 :
If you are not able to exchange the old currency notes till 30th December,2016 then you can do the same by submitting a declaration at the RBI offices till 31st March,2017.
However,it is anyways better to exchange it before 30th December,2016 to avoid any hassles later on.
8. Currency Notes in circulation at present :
Various rumours are being spread everywhere as to which notes are presently in circulation. Just to clarify on the matter :
- The old Rs.500 and Rs.1000 notes acceptable at certain places as directed by the Government from time to time (explained in point above).
- Lower denomination currency notes and coins : Rs.100,Rs.50,Rs.20 Rs.10 and Rs.5 and coins of Rs.10,Rs.5,Rs.2 and Re 1 are valid currency.
- New currency notes of Rs.2000 have been brought into circulation through banks and ATMs.
- New currency notes of Rs.500 have also been introduced and are available at some places.
- New currency note of Rs.1000 is not yet introduced.You might get to see it in the near future.
9. E-payments :
There is no distraction in the process of E-payments or non-cash payments that are done online or otherwise. So,you can continue your payments through any of the following modes like :
- Demand drafts
- Electronic transfer
- Debit cards (subject to restriction on withdrawal limits set)
- Credit cards
In fact,there has been a huge increase in the no.of online transactions in the past few days.People have opted for payments through credit cards and E-wallets in large numbers. This is a welcome step for converting India into a Cash less economy and encouraging people towards Digital India.
10. Additional measures to reduce panic :
The old currency notes being abolished was not less than a nightmare for many people in the country.There was a situation of panic amongst the people while exchanging or depositing their money standing in queues,falling short of cash for day to day necessities etc.
Seeing the inconvenience to the common man, few additional steps have also been taken to ease the situation :
- Separate queues for senior citizens and disabled in the banks ( We don’t know exactly how many banks are following this).
- Mobile ATM vans or Micro-ATMs have been sent to few places in the urban and rural areas.
- All national highways have been made toll free till 18th November,2016.
- The parking at Indian airports has been made free till 21st November,2016.
Demonetisation of currency was brought in with good intentions of curbing black money and giving a severe blow to corruption,fake currency and terrorism.
But,its implementation has somewhere,in one way or the other affected the people of India ranging from labour, small traders, big traders,the middle class, the businessmen or even the political parties.
Some hailed the move, some opposed it, a mix of reactions coming from all over India.
We hope the Government and the general public overcomes this difficult situation in the coming days.
What are your views regarding this massive and bold step taken by the Government ? You want to add anything to the above list ?
Feel free to share your valuable feedback in the comment section below !
Also,have a look at our popular blog post 7 Best Long term Investment Options in India !
Whatever you do, do it sincerely and honestly…Follow the rules and regulations and the laws as applicable and you will have nothing to worry about !