Ban On Rs.500, Rs.1000 Notes – All You Should Need To Know
Yesterday at 8pm, honorable Prime Minister Narendra Modi addressed the nation and since then there is a huge havoc happening all around! The PM declared all the Rs.500 and Rs.1000 to be invalid from 9th November 2016. This news spread like an epidemic and people panicked. News flashed on media saying – Starting midnight Rs.500 and Rs.1000 currency notes will not be a legal tender and there was a huge rush witnessed in front of all the ATMs to withdraw and deposit. PM also said that every citizen has next 50 days to submit these currency notes in banks and post offices to get it replaced. The sudden news has indeed put a lot of people still in a dilemma as they still could not digest what exactly is happening and what they are supposed to do with the 500/1000 notes in hand. For all those confused people, read this article to know what exactly has happened and what you can do with your 500/1000 notes, and how to get it exchanged.
What you can do if you are having any 500/1000 notes in hand?
- You can exchange these notes in banks, head post offices and sub-post office within December 30, 2016, only by providing a valid identity proof such as Aadhaar card, PAN card or voter ID card. This limit is Rs.4,000 up to 24th November.
- If you possess any of these old 500/1000 notes even after December 30, 2016, then you can exchange it in Reserve Bank of India by providing a declaration. This will be valid until March 31, 2017.
- You can deposit old 500/1000 notes in banks or post offices from 10th November 2016 without any limit. Limit of withdrawal per day will be Rs.10,000 and Rs.20,000 per week. This limit will be increased in the coming weeks.
- You can withdraw only up to Rs.2000 per day from any ATM from a single card. This will be raised to Rs.4000 later.
There will be no more Rs.1000 note and instead RBI will soon issue Rs.2000 denomination currency notes. Meanwhile, all the banks and ATMs will be shut down today and at some places on tomorrow as well to refill with the new Rs.500 and Rs.2000 currency notes, which was supposed to be printed months before.
Why RBI issuing Rs.2000 currency notes?
Wondering why the sudden eradication of Rs.1000 and issuance of Rs.2000? All these new rules have been improvised keeping in mind to eradicate the black money issue that is prevailing in the country. The new Rs.2000 note will be embedded with NGC (Nano GPS Chip) that will act as a signal reflector and does not need any power source.
How NGC works?
When a satellite sends a signal requesting the location of the NGC, it reflects back signal from its location, thus giving the exact location, the serial number of the currency. In this way, NGC embedded currency can be easily tracked and located even if it is kept 120 meters below the ground level. You cannot tamper or remove NGC without damaging the currency note! Thus, every NGC embedded currency note can be tracked and the satellite can track the exact amount of money stored at a certain location. If any high amount of money is tracked suspiciously at a certain location for more than a period of time other than banks and other finance related institutions, the information will be passed over to the Income Tax Department for further probing. News also claims that there is nothing called NGC chip as such but this new policy is nothing but a new step to completely eradicate the black money.
Why this scheme?
This new scheme of NGC has been introduced to completely eradicate the incidence of increased fake Indian currency notes in a higher denomination. A common man cannot easily differentiate between the fake and the original currency notes that easily. Also, the fake notes are used for anti-national and illegal activities, misused by terrorists and for hoarding black money. Since India is a cash-based economy, the circulation of fake currency notes completely destroys the economic system. In order put an end to this, this scheme has been introduced.
Need not panic if you have any 500/1000 notes with you as you will get the full value for the entire volume of notes tendered at the bank, post offices or RBI offices. You will get up to rs.4000 in cash and the remaining amount if any will be credited to your bank account. You can use your bank balance for any mode of payment via internet banking, mobile wallets, IMPS, credit/debit cards, etc.
If you do not have a bank account, approach a bank with necessary documents fulfilling the KYC requirements. You can even exchange your notes via your relative or friend account, provided the person gives you the permission in writing and you should provide to the bank the evidence of permission given by the account holder and submit your valid ID proof.
Hope now you are clear with the new scheme and what to do with your old 500/1000 notes. Share your views/doubts in the comment box below.Ban On Rs.500, Rs.1000 Notes - All You Should Need To Know by Gayathry