Banks, POs given 30 days to exchange demonetised notes at RBI

The government on Wednesday issued a notice permitting banks and post offices to exchange old currency notes worth Rs 500 and Rs 1000 with the Reserve Bank of India (RBI) within the next 30 days, provided these notes were collected by December 30, 2016.

In a notice issued by the Department of Economic Affairs, the Centre highlighted the updated norms, paying heed to the powers conferred by sub-section (1) of Section 11 of the Specified Bank Notes (Cessation of Liabilities) Act, 2017.

Under the revised norms, the new rules, called as Specified Bank Notes (Deposit by Banks, Post Offices and District Central Cooperative Banks) Rules, 2017 shall come into force starting from the date of their publication in the Official Gazette.

Deposit of specified bank notes with the RBI, where in pursuance of the notification of the Government of India in the Ministry of Finance number S.O. 3407(E), dated the November 8, 2016, published in the Gazette of India, specified bank notes which have been accepted by any bank or post office on or before December 30, 2016; or by any district central cooperative Bank within the period of November 10 to 14, 2016, may be deposited by such bank, post office or district central cooperative bank, within a period of 30 days from the commencement of these rules.

The exchange value thereof will be credited to the account of such bank, post office or district central cooperative bank, as the case may be, subject to the satisfaction of the RBI regarding compliance with the conditions specified in the said notification and the reasons for non-deposit of the specified bank notes within the period under that notification.

Prime Minister Narendra Modi's demonetisation drive was rolled out on November 8 last year, imposing a ban on the circulation of Rs 500 and 1000 notes, with subsequent circulation of Rs 2000 notes that were printed to balance the cash flow.

Citizens were allowed to exchange their notes until December 31, 2016, following which the ban would be imposed. However, in case of NRIs living abroad, the RBI revealed that they would be given time till June 30, 2017 to exchange notes up to Rs 25,000. Anybody possessing money more than the aforementioned limit would be deemed as an offender.

Under the Specified Bank Notes (Cessation of Liabilities) Act, 2017, which was passed in March 2017, it is illegal for Indian citizens to hold more than ten notes of the invalid currency after March 31, 2017.