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Demonetisation: A look at the changing rules for withdrawals and deposits

In a surprise move Prime Minister Narendra Modi, on November 8, 2016, scrapped high value banknotes of Rs 500 and Rs 1000. The stated motive was a crackdown on black money and so the secrecy around it. The shortage of new currency and the confusion that ensued led the government to repeatedly change rules of cash withdrawals and deposits. Here is a list of the ever-changing rules.

black money crackdown Updated: Mar 31, 2017 07:11 IST
Suchetana Ray
Long queues of people outside RBI as there are only 2 days left to exchange the old 500 and 1000 rupee note at Fort in Mumbai, India.
Long queues of people outside RBI as there are only 2 days left to exchange the old 500 and 1000 rupee note at Fort in Mumbai, India.(Pratik Chorge/HT Photo)

In a surprise move Prime Minister Narendra Modi, on November 8, 2016, scrapped high value banknotes of Rs 500 and Rs 1000. The stated motive was a crackdown on black money and so the secrecy around it. The shortage of new currency and the confusion that ensued led the government to repeatedly change rules of cash withdrawals and deposits.

Here is a list of the ever-changing rules, as demonetisation officially ends on March 31, after Friday, RBI will not accept old notes. Only NRIs can deposit the banned currency at RBI offices till June 30.

Cash Exchange/Deposit:

November 8: Government announced that old notes worth Rs 4000 can be exchanged at banks.

November 13: Cash exchange limit over the counter increased to Rs 4500.

November 17: Limit reduced to Rs 2000.

November 24: Old notes cannot be exchanged at banks only deposits allowed. Only foreigners allowed to exchange currency up to Rs 5000 per week.

December 19: RBI imposes deposit cap of Rs 5000 until Dec 30 subject to satisfactory response on such late deposit

December 21: RBI withdraws notification

December 30: Deposit of old notes not allowed anymore at banks. They can be exchanged at RBI offices across the country.

March 31, 2017: Exchange of old notes at RBI offices not allowed any more.

Cash Withdrawal:

November 8: Government limits ATM withdrawals at Rs 2000.

November 8: Withdrawal limit from banks fixed at Rs 20,000 for a week and a daily limit at Rs 10000.

November 13: Cash withdrawal limit at ATMs increased to Rs 2500 per day in the recalibrated ATMs.

November 13: The weekly limit for withdrawal from bank accounts increased to Rs 24,000, the daily limit is removed.

November 30: RBI tightens monthly withdrawal rules from “Jan Dhan” accounts for poor, puts limit of Rs 10,000 on withdrawals from Jan Dhan.

January 1, 2017: Cash withdrawal limit from ATMs increased to Rs 4500.

January 30: Cash withdrawal limits removed from current accounts.

February 20: Cash withdrawal limit relaxed to Rs 50,000 from savings account.

March 13: All limits from ATM withdrawals removed.

Use of Old Notes:

November 8: Old notes to be accepted at government hospitals, fuel stations, airports and railways.

November 9: Old notes to be accepted even at metro stations, ASI monuments, toll plazas and medicine shops.

November 10: Government announced that now- defunct currency notes of 500 and 1000 will be accepted for making payments towards fees, charges, taxes and penalties payable to the central and state governments including municipal and local bodies, and other utility charges like water and electricity.

November 14: Government extends existing exemptions for acceptance of old Rs 500 and Rs 1000 notes up to 24 November, 2016 midnight.

November 24: Old notes of Rs 1000 cannot be used. Government allows use of Rs 500 to pay for fuel, mobile recharges, water and power bills. Government-run school and college fees can also be paid with old notes of Rs 500.

December 2: Government disallows use of old Rs 500 notes at fuel stations and for buying air tickets.Old notes of Rs 500 can be used for railway, metro and bus tickets, till December 10.

Exceptions for Farmers:

November 17: Farmers allowed to withdraw up to Rs. 25000 per week to ensure proper sowing of Rabi crops. Agriculture traders allowed to withdraw Rs 50000 to facilitate smooth operation of mandis.

Exceptions for Weddings:

November 17: Families allowed to withdraw up to Rs 2,50,000 from their own bank accounts, in case of a wedding.