Citizens protest as RBI refuses to exchange old notes..

Endless changes regarding currency rules post demonetisation order on 8 Nov 2016 has really taken a toll on people. It is a huge issue for this blog which has been tracking the episode fairly religiously. One can just imagine the case for other people.

Yesterday, there were protests outside RBI offices (Mumbai, Ahmedabad, Bangalore) as people thought they could exchange/deposit old notes at RBI offices:

Tension prevailed on the premises of Reserve Bank of India (RBI) office on Nrupatunga Road on Monday, as scores of people who had turned up to exchange the demonetized Rs 500 and Rs 1000 notes for the new tender were turned back by the bank officials.

The restive crowd, many of whom had come from far-off places, got involved in heated arguments with the RBI officials, prompting the latter to call police to the spot to bring the situation under control.

“I came all the way from Mandya to exchange the notes. We were told that we would be able to exchange the notes at the RBI office till March 31. Now, they are saying the facility does not exist any longer,” said Sidde Gowda, who had come to the RBI office here with Rs 50, 000 in demonetized notes.

They did not realise that Govt/RBI had once again gone back on its words.

Let us once again go back on Reverse Bank of India orders.

On 8 Nov 2016, the Govt/RBI clearly said that those who are unable to exchange old notes during 8 Nov – 30 Dec 2016 in banks shall be able to do at RBI offices:

For those who are unable to exchange their Old High Denomination Bank Notes or deposit the same in their bank accounts on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI on later dates along with necessary documentation as may be specified by the Reserve Bank of India.

On 30 Dec 2106, the authorities did a volte-face. They said this RBI facility will be available to only those people who were  living outside India. Moreover, number of RBI offices where this can be done was reduced to just 5 places. Further Resident Indians can exchange only till Mar 31 2017 and NRI till Jun 30 2017.

In terms of Section 4 (1) of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 of the Government of India dated December 30, 2016 and their Notification S.O. 4251(E) dated December 30, 2016 thereunder, the captioned facility has been formulated by the Reserve Bank to afford an opportunity to those Indian citizens who could not avail facilities of exchange of SBNs under the earlier facility, as they were not present in the country during November 9, 2016 to December 30, 2016.

The provisions of the facility are as under:

2. Places of Exchange.

This facility will be made available through five of the offices of the Reserve Bank viz. the Reserve Bank offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur.

3. Eligible persons.

3.1 The facility can be availed only by Indian citizens in their individual capacity and only on one occasion during the period. No third party tender is permissible under the facility.

3.2 Among Indian citizens, two categories of individuals, holding SBNs, can avail of the facility:

i.  Resident Indians who were abroad during the period from November 9 to December 30, 2016, and

ii. Non Resident Indians(NRIs) who were not in India during the period from November 9 to December 30, 2016

3.3 This facility will not be available for Indian citizens resident in Nepal, Bhutan, Pakistan and Bangladesh.

The conditions for Resident Indians are as elaborate and skillfully laid out:

Resident Indians

  1. Only those residents  who were abroad during the period from November 9, 2016 to December 30, 2016 will be eligible to avail this facility  only once during the tenure of the facility.
  2. There will be no monetary limit for submission of SBNs in the tender.
  3. Tenders should be submitted in a Tender Form as per Annex 1 with necessary documentary evidence to prove they were abroad during the said period.
  4. A copy of Passport with immigration stamp as proof of the individual’s absence from the country during the period November 9, 2016 to December 30, 2016 should be submitted. Passport in original should be presented at the RBI counter for verification.
  5. Copies of all bank account statements evidencing that no SBNs were deposited during November 10, 2016 to December 30, 2016.
  6. Tender should be accompanied by Valid ID Proof and Aadhaar number along with applicant’s KYC compliant bank account details.
  7. Requisite document as per provisions of Section 114B of IT Rules, 1962 will be required
  8. An acknowledgment of receipt will be issued to the tenderers pending credit of admissible amount.
  9. On ascertaining that the tenderer was abroad during the period from November 9, 2016 and December 30, 2016, the account is KYC compliant, fulfilment of other conditions and the genuineness of the notes tendered, admissible amount will be credited to the account under advice to the tenderer.

Wow. Even more elaborate than previous licence raj era.

If government had to go back on its words, it should have announced this much earlier.  People all along thought they could exchange at RBI office after 30 Dec 2016. It announced this too late and on the new year weekend and am sure people had no idea about the change as it showed when business opened on 2 Jan 2017.

It is even funnier that RBI says this:

Any person, aggrieved by the refusal of the Reserve Bank to credit the value of SBNs tendered, may represent to the Central Board of the Reserve Bank within fourteen days of the communication of such refusal to him. Such representations should be addressed to the Central Board, Reserve Bank of India, Secretary’s Department, Central Office Building, 16th Floor, Shahid Bhagat Singh Marg, Mumbai – 400 001.

RBI Board is it?

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