All banks have been asked to ensure that their ATMs dispense bank notes of Rs50 and Rs100 denomination until further instructions from the RBI
New Delhi: The government has announced the gazette notification, formally withdrawing the Rs500 and Rs1,000 currency notes to be replaced by new currencies of Rs500 and Rs2,000 denominations starting from Thursday.
On Tuesday evening, Prime Minister Narendra Modi, in a surprise televised address, announced the government’s move to weed out the menace of black money and counterfeit notes in circulation.
The notification said it has been found that fake currency notes of these high-value bank notes have been largely in circulation and it has been found to be difficult to easily identify genuine bank notes from the fake ones and that the use of fake currency notes is causing adverse effect to the economy of the country. It also said these high-value currencies were being used to store unaccounted wealth as has been evident from the large cash recoveries made by law enforcement agencies.
The government directed banks and government treasuries to complete and forward a return showing the details of specified bank notes held by it at the close of business by Thursday to the designated regional office of the Reserve Bank of India (RBI). All banks have been asked to ensure that their ATMs dispense bank notes of Rs50 and Rs100 denomination until further instructions from the RBI.
The notification clarified that there shall not be any limit on the quantity or value of the specified bank notes to be credited to the account maintained with the bank by a person, where the specified bank notes are tendered.
However, it said where compliance with Know Your Customer (KYC) norms is not complete in an account, the maximum value of specified bank notes as may be deposited will be Rs50,000.
In another gazette notification, the government assured that these two high-value currencies will be acceptable where exemptions have been allowed till Friday.
“It has become necessary to notify certain exemptions for the convenience of the members of the public in carrying out certain emergent or urgent transactions using the specified bank notes," the notification said.
It said that in exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934, “the central government hereby declares that the specified bank notes shall not be ceased to be legal tender, with effect from 9 November, 2016 until the 11 November, 2016" for certain transactions.
It listed eight specific transactions announced by Modi on Tuesday, which included government hospitals, pharmacies, railway and air ticket counters, milk booths, petrol stations, burial grounds, international airports and for foreign tourists.
However, it said that all such establishments will maintain complete account of record of stock and sale of transactions made with the specified bank notes.
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