In a televised address to the nation, PM Modi announced that Rs 500 and Rs 1,000 will no longer be valid from today. Here's how this momentous move will impact you and what you can do about it in the coming days.
The announcement of Prime Minister Narendra Modi, in a televised address to the nation, that the current notes of Rs 500 and Rs 1,000 will no longer be valid from today, instead notes of Rs 2,000 and a newly designed Rs 500 will be introduced has evoked mixed response from the Indian public. While the decisive move is expected to boost the economy and act against black money, it has also caused apprehensions about the inconvenience it may cause to the common man.
To keep the inconvenience to a bare minimum for the public, the government has allowed petrol pumps, government banks and certain retail shops to accept the existing 500 and 1000 notes for the next 72 hours i.e. on 9th, 10th and 11th. Railway ticket booking counters, ticket counters of government buses and airline ticket counters at airports will also accept old notes for the purchase of tickets in this period.
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Banks will remain closed to the public on 9 November, in order to cope with the sudden decision. ATMs will be shut on 9 and 10 November. Till 11 November, there will be cap of Rs 2,000 on ATM withdrawals per card per day, which will be gradually increased. The Reserve Bank of India will begin issuing new Rs 500 and Rs 2,000 currency notes from 10 November.
Here’s how this momentous move will impact you and what you can do about it in the coming days.
The Impact On Day-to-Day Life
1. Once banks reopen and begin to exchange the old currency bills for new ones, you can expect long queues in banks and a general slowdown of work
2. There’ll be a limit on the withdrawal of money from banks and post offices – Rs 10,000 per day and Rs 20,000 per week for the first fortnight, i.e., until the end of business hours on November 24, 2016. This means if you do not use an ATM or electronic transfer for transactions, you will have big problem in purchasing things from the market.
3. People living in rural areas without ATMs will find it difficult to deal with this decision – they usually keep some cash at their homes as they cannot go to banks every day. The impact could be more severe in the remote hinterland as well as for daily-wage labourers who have poor access to banking or are unaware of the procedure.
4. Small-scale jewellers, grocery shop owners and small vendors will find it difficult to sell their products in the absence of hard cash. On the other hand, big supermarkets and showrooms that accept credit and debit cards are likely to register a spike in their sales, as people will be able to pay through their card here.
What you can do
While there will be some inconvenience as the transition to the new notes happens, the great news is that there is no need to panic provided, all your money is accounted for. There is a wide window available for you to exchange your older notes at the bank. As PM Modi said, “Your money will remain yours. You need have no worry on this point.” Here is a checklist of what you can do to handle the situation if you are hit by the currency cancellation.
1. If you have already withdrawn higher value notes, you can deposit them through ATMs, cash deposit machines and cash recyclers instead of visiting banks for the same.
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2. From November 10 till December 30 you can deposit the old notes at your nearest bank, Issue Offices of RBI or post office accounts without any limit. No transaction charge will be deducted by the bank in any case. You will get the full value of the money exchanged or deposited. This exchange of money can be done if you have the following documents:
- Requisition slip
- Proof of Identity – Aadhaar Card, Driving License, Voter ID , Pass Port, NREGA Card, PAN Card, ID Card issued by Government Department, ID Card issued by Public Sector Unit to its Staff.
- Old currency notes
If you are unable to deposit your Rs 1,000 and Rs 500 notes by December 30 for some reason, you could exchange the notes until March 31, 2017, by furnishing your ID proof. If you miss that date too, you can go to RBI, fill a declaration form and exchange your money.
2. You can also exchange Rs 500 and Rs 1000 notes for lower denomination at banks, head post offices and sub-post offices. However, the exchange limit has been capped at Rs 4,000, and you can exchange till November 24. However, one must produce a valid government identity card.
3. This is the best time to go cashless – there are no restrictions of any kind on non-cash payments by cheques, DDs, debit or credit cards and electronic fund transfer.
4. Valid Currency: Notes of one hundred, fifty, twenty, ten, five, two and one rupee and all coins will remain legal tender and will not be affected. From November 10 onwards, RBI will start issuing the new Rs 500 and Rs 2000 notes.
5. For tourists and international travellers: Arrangements will be made at international airports for arriving and departing passengers (including foreign tourists) who have Rs 500 or Rs 1000 notes of not more than Rs 5,000, to exchange them for new notes or other legal tender.
6. How you can help those who don’t have a bank account:
- Ask your maid, security guards, driver etc if they have a bank account. If they don’t, help them arrange their KYC (Know Your Customer) documents and open a bank account in a nearby branch.
- No frills accounts under the Jan Dhan Yojana can also avail of the exchange facility subject to the caps and other laid down limits in accord with norms and procedures.
- Another way you can help them by getting their note exchanged. This is what RBI Guidelines say: “A person with no personal account of her own can avail of this exchange facility via a relative/friend’s account with written permission. But while exchanging, one should provide the evidence of permission given by the account holder and own valid identity proof.”
- You can also help in small ways by getting their mobiles recharged and paying any of their urgent bills online.
- Buying groceries is one of the most immediate worries for the common man. If you are ordering groceries online and have people around you who are unable do so and need them urgently, you can help them out by sharing or giving them a loan.
7. Do you have to visit your home branch? No, its not the only option. Here’s what RBI says:
- For exchange up to 4000 in cash, you may go to any bank branch with valid identity proof.
- For exchange over 4000, which will be accorded through credit to Bank account only, you may go to the branch where you have an account or to any other branch of the same bank.
- In case you want to go to a branch of any other bank where you are not maintaining an account, you will have to furnish valid identity proof and bank account details required for electronic fund transfer to your account
8. Those who are outside the country can get their exchanges done by authorising in writing another person in the country to deposit the notes into your bank account with the authority letter and identity proof such as Aadhaar card, driving license, voter ID card, passport, NREGA card, PAN card etc.
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