You need money in a hurry. You rush to the ATM to withdraw money and fill your wallet. This is when you get a nasty shock….there is a long queue in front of the ATM. It’s going to take you a couple of hours, to withdraw money. You have a few 500 and 1,000 rupee notes lying at home, which you want to exchange at the bank. Unfortunately the queue at the bank branch is equally long. The Prime Minister Narendra Modi, scrapped 500 and 1,000 rupee notes, effective midnight November 8th 2016.
Banks were shut the next day. ATM’s were shut for a couple of days. On Friday, people rushed to the ATM’s, only to find many of them shut. Several ATM’s had run out of cash. Worse….limits were imposed on how much money, you could withdraw at bank branches.
- You could withdraw only a maximum of INR 2,000 per card per day, up to November 18th 2016. This limit would be raised to INR 4,000 per card per day, from November 19th November 2016.
- You would be able to exchange up to INR 4,000 in cash at the bank, for your 500 and 1,000 rupee notes. If you exchange 500 and 1,000 rupee notes more than this, any amount above INR 4,000, will be transferred through electronic fund transfer, to your bank account. You could exchange these rupee notes till November 24th 2016.
- There is a limit on the money; you could withdraw from banks and post offices. You could withdraw only INR 10,000 a day and INR 20,000 a week.
What’s the consequence of this move…..
- Long queues at banks and ATM’s, as citizens rush to withdraw money. Several citizens have many debit cards. They withdraw up to INR 2,000 per card on each card. ATM’s are running dry in no time.
The Government has come up with new rules….
- The cash withdrawal limit has been increased from INR 2,000 to INR 2,500 a day.
- Earlier, you could exchange old 500 and 1,000 rupee notes at banks and post offices, up to INR 4,000 a day. Now you can exchange your old 500 and 1,000 rupee notes, for freshly minted INR 500 and INR 2,000 rupee notes, up to INR 4,500 a day.
- The weekly limit of INR 20,000 has been increased to INR 24,000.
- The existing daily cash withdrawal limit of INR 10,000 from bank branches, has been removed.
- The Government has started issuing the new series of INR 500 notes, to reduce the burden on citizens.
- The Central Government has asked State Governments, to ensure citizens can easily open new bank accounts.
- The Government has asked banks and post offices, to ensure proper distribution of rupee notes of all denominations, particularly in rural areas. Money will be distributed through mobile vans and BC’s (Business Correspondents). This will reduce pressure on citizens in rural areas.
- There will be separate queues for old and differently-abled citizens, at bank branches. There will also be separate queues for citizens, exchanging old 500 and 1,000 rupee notes at bank branches.
- The old 500 and 1,000 rupee notes, will continue to be accepted at Government hospitals, petrol stations and toll booths, till November 24th 2016.
- Banks have been advised to arrange mobile banking vans at major hospitals. These mobile banking vans would help carry out emergency banking transactions, for patients.
Yes….the Government is doing its best, to make sure you don’t suffer, when you need money. Just sit back and relax. Worried about how to handle money? Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and capital markets.