Ban on Rs 500 Rs 1000 currency notes : CA Rishi Goyal

Modi lead BJP government has taken a huge step forward and announced the ban on Rs 500 Rs 1000 currency notes. The move is being expected to be an effect way to tackle several problems including, black money, fake currency, terrorism and drugs.

1. Ban on Rs 500 Rs 1000 currency notes from 09 November: – On 8^th November, Central Government declared that notes of existing series of denomination of Rs. 500 and Rs. 1000 shall cease to be legal tender from the 9th November, 2016.

2. Validity of such notes for specified transactions:- Further Central Government hereby declares that these notes shall not be ceased to be legal tender, from the 9th November to 11th November, 2016 for the following transactions:

• For making payments in Government hospitals for medical treatment and pharmacies in Government hospitals for buying medicines with doctor’s prescription;

• Railway ticketing counters, ticket counters of Government or Public Sector Undertakings buses and airline ticketing counters at airports for purchase of tickets;
• For purchases at consumer cooperative stores operated under authorization of Central or State Governments;
• For purchase at milk booths operating under authorization of the Central or State Governments;

• For purchase of petrol, diesel and gas at the stations operating under the authorization of Public Sector Oil Marketing Companies;

• For payments at crematoria and burial grounds
• At international airports, for arriving and departing passengers, who possess specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character;

• For foreign tourists to exchange foreign currency or specified bank notes, the value of which does not exceed five thousand rupees to exchange them for notes having legal tender character.

All establishments referred above, shall maintain complete account of record of stock and sale of transactions made with the specified bank notes during the period between 9th November, 2016 and 11th November, 2016.

3. Exchange of notes with Banks or RBI:- The specified bank notes held by a person may be exchanged at any Issue Office of the Reserve Bank or any branch of public sector banks, private sector banks, foreign banks, Regional Rural Banks, Urban Cooperative Banks and State Cooperative Banks for a period up to and including the 30th December, 2016, subject to the following conditions:-

• Cash withdrawal from a bank account over the counter shall be restricted to Rs.10,000/- per day subject to an overall limit of Rs. 20,000/- a week from the date of commencement of this notification until the end of business hours on 24th November, 2016, after which these limits shall be reviewed

• Withdrawal from ATM shall be restricted to Rs.2,000 per day per card up to 18th November, 2016 and the limit shall be raised to Rs.4,000 per day per card from 19th November, 2016

• Upto Rs.4,000/- may be exchanged for any denomination(i.e. 100,50,20,10,5,2,1) of bank notes with a requisition slip in the format specified by the Reserve Bank and proof of identity

• The limit of Rs.4,000/- for exchanging specified bank notes shall be reviewed after fifteen days from the date of commencement of this notification i.e. 9^th November and appropriate orders may be issued

• There shall not be any limit on the quantity or value of the specified bank notes(i.e. 500, 1000) to be credited to the account maintained with the bank by a person however, where compliance with extant (KYC) norms is not complete in an account, the maximum value of specified bank notes as may be deposited shall be Rs.50,000/-

• The equivalent value of specified bank notes may be credited to an account maintained by the person at any bank in accordance with standard banking procedure and on production of valid proof of Identity;

• The equivalent value of specified bank notes may be credited to a third party account, provided specific authorization therefor accorded by the third party is presented to the bank, following standard banking procedure and on production of valid proof of identity of the person actually depositing.
• 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 mechanisms or the like;
• Any person who is unable to exchange or deposit the specified bank notes in their bank accounts on or before the 30.12.2016, shall be given an opportunity to do so at specified offices of the Reserve Bank till 31.03.2017

4. Bank & ATM will be closed:- Every banking company and every Government Treasury shall be closed for the transaction of all business on 9th November, 2016.

Further, All ATMs, Cash Deposit Machines, Cash Recyclers and any other machine used for receipt and payment of cash shall be closed on 9th and 10th November, 2016.

The ban on Rs 500 Rs 1000 currency notes has received mixed reactions, however mostly seems to be a welcome move. Please feel free to share your thoughts and comments regarding ban on Rs 500 Rs 1000 currency notes.