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Discontinuation of currency notes of ₹ 500/- and ₹ 1000/- issued by RBI w.e.f. midnight of 08.11.2016

Corporate Laws / Banking / SEBI - By: - CA DEV KUMAR KOTHARI - Dated:- 10-11-2016 - News: From news of TV channels and news in e- news papers we found that currency notes of ₹ 500/- and ₹ 1000/- issued by RBI will be almost scraped w.e.f. midnight of 08.11.2016 and will be useful only for limited purposes and limited amount. No notification found on website of RBI: Till 22:10 hours of 08.11.2016 notification is not found on website of RBI. However, some information are provided on th .....

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otifications is reproduced below: Notification FOR DISCONTINUATION OF NOTES WAS NOT AVAILABLE. LATEST NOTIFICATION UPLOADED ON WEBSITE IS OF 07.11.2016. Notifications Nov 07, 2016 External Commercial Borrowings (ECB) - Clarifications on hedging 23 kb Auction of Government of India Dated Securities 91 kb Auction for Sale (Re-issue) of 6.84 per cent Government Stock 2022 18 kb Auction for Sale (Re-issue) of 6.97 per cent Government Stock 2026 18 kb Auction for Sale (Re-issue) of 7.73 per cent Gove .....

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7; 50, ₹ 100, ₹ 500 and ₹ 1000. Therefore, there was no information on website of RBI for the action reported in news and through mouth of honourable Prime Minister. Detailed chapter is given in this write-up. Thoughts after listening and reading news: After listening news and reading news in net author find that the relief provided is only in a limited way to individuals. Business difficulties have not been considered. For example, some of difficulties are as follows: Cash sal .....

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ith small denomination notes of ₹ 100/- ,50/- , 20/-, 10/- etc. for meeting petty expenses. Similarly even a taxi driver can be holding about ₹ 2000/- to 3000/- which he use for refilling diesel and making payment to taxi owner or repayment of loan etc. In case of shops cash sale is common and sizable amount of cash in notes of ₹ 500/- and ₹ 1000/- are collected and the same is deposited in banks daily or periodically for making payment to supplier. These shop keepers wil .....

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ing family expenses. Salary payment is usually made between this period. If salary is deposited in bank account, one need to withdraw cash to meet family expenses. This includes payables to domestic helps, gardeners, drivers, sweepers, car cleaner , Dhobi-cloth -washer man - cloth iron man. There will be hardship in such payments. Discontinuation of both ₹ 500/- and ₹ 1000/- at the same time is not justified: Rs.500/- is much less in value these days for making many of payments. The .....

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e, it was desirable that first ₹ 1000/- notes be discontinued and then ₹ 500/-notes could be discontinues. Merely opening of bank account is not enough: Bank accounts opened in Jan Dhan Yojna is considered a big achievement. However, the number of new accounts opened in the scheme has many accounts which are opened additional account by people who already had banc account. Therefore, it is estimated that only 60% of account opened in the scheme are for new account openers and balance .....

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es from merchant, transaction charges from card holder, late payment charges, financial charges and service tax on all such charges is a heavy cost. These must come down if these channels of payment are to be preferred. Many shops and in trades where margins are very low, demand extra charges from customers, if a payment is made by credit card for example jewellery shops, electronic goods shops, hardware goods shops, consumer goods shops etc. Some news reports: http://economictimes.indiatimes.co .....

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vernment hospitals to accept old ₹ 500, ₹ 1000 notes Citizens have 50 days from Nov 10 to return notes at banks, post offices In a sudden address to the nation, Prime Minister Narendra Modi has announced that starting midnight, existing ₹ 500 and ₹ 1,000 notes can no longer be used for any transactions. They must be deposited, starting Thursday and through December 30, at post offices and banks, he said, describing the move as essential to fight the disease of black money .....

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; 4,000 till November 24 and for larger amounts thereafter. Against notes that are deposited, withdrawals of upto ₹ 10,000 a day or 20,000 a week will be permitted for now. PM Modi, urging the country to bear with temporary hardships in the implementation of the new rule, said that banks will be closed to the public tomorrow and ATMs will not work in some places for the next 48 hours. The PM said that though India is now a global bright spot with its fast-growing economy, corruption and bl .....

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being employed by the enemy across the border to sponsor deadly attacks. ***** ₹ 500, ₹ 1000 notes are no longer legal tender: What you need to know and do ECONOMICTIMES.COM| Updated: Nov 08, 2016, 09.28 PM IS 1. Keep calm: you have 50 days time to exchange / deposit your old notes in banks / post office and lower denomination notes and coins will remain legal tender. 2. Emergency requirements have been taken care of. Some leeway has been given by the government for use of these note .....

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s/story-qdhNEvCqQ0zrtZrPblN1FK.html Prime Minister Narendra Modi, in a televised address to the nation on Tuesday, announced that ₹ 500 and ₹ 1,000 denomination notes are being withdrawn from midnight. He said that such notes will become mere paper . Here s what you need to know and do in the next few days: # All banks will remain closed for public work on November 9. # Deposit currently used notes of ₹ 500 and ₹ 1000 in post office accounts or banks by December 30, 2016. .....

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and electronic fund transfers. # ₹ 500 and ₹ 1000 will cease to be legal tender from the midnight of November 8, 2016. # On Nov 9 and in some places on Nov 10, 2016, ATMs will not work. # For 72 hours, these places and institutions will continue to accept ₹ 500 and ₹ 1000 notes for payment: -Government hospitals will continue to accept old ₹ 500, ₹ 1000 notes for payment. -Rrailway ticket booking counters, ticket counters of government buses and airline ticket .....

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Today, credit cards and electronic cash form an important component of the payment system. For a common person though, money simply means currency and coins. This is so because in India, the payment system, especially for retail transactions still revolves around currency and coins. There is very little, however, that the common person knows about currency and coins he handles on a daily basis. Here is an attempt to answer some of the Frequently Asked Questions on Indian Currency. Some Basics W .....

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ons of Re.1 and ₹ 2 has been discontinued as these denominations have been coinised. However, such notes issued earlier are still in circulation. The printing of notes in the denomination of ₹ 5 had also been discontinued; however, it has been decided to reintroduce these notes so as to meet the gap between the demand and supply of coins in this denomination. What are the present available denominations of coins in India? Coins in India are available in denominations of 10 paise, 20 .....

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nominations higher than ten thousand rupees in terms of the current provisions of the Reserve Bank of India Act, 1934. Coins can be issued up to the denomination of ₹ 1000. Currency Management What is the role of the Reserve Bank in currency management? The Reserve Bank manages currency in India. The Government, on the advice of the Reserve Bank, decides on the various denominations. The Reserve Bank also co-ordinates with the Government in the designing of bank notes, including the securi .....

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ts role in currency management on the basis of the Reserve Bank of India Act, 1934. What is the role of Government of India? The responsibility for coinage vests with Government of India on the basis of the Coinage Act, 1906 as amended from time to time. The designing and minting of coins in various denominations is also attended to by the Government of India. Who decides on the volume and value of bank notes to be printed and on what basis? The Reserve Bank decides upon the volume and value of .....

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nomy, the replacement demand and reserve requirements by using statistical models. How does the Reserve Bank reach the currency to people? The Reserve Bank manages the currency operations through its offices located at Ahmedabad, Bangalore, Bhopal, Bhubaneshwar, Belapur(Navi Mumbai), Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Lucknow, Mumbai (Fort), Nagpur, New Delhi, Patna and Thiruvananthapuram. These offices receive fresh notes from the note presses. Similarly, the Res .....

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upee coins, the Reserve Bank has authorised selected branches of banks to establish currency chests. These are actually storehouses where bank notes and rupee coins are stocked on behalf of the Reserve Bank. At present, there are over 4422 currency chests. The currency chest branches are expected to distribute notes and rupee coins to other bank branches in their area of operation. What is a small coin depot? Some bank branches are also authorised to establish small coin depots to stock small co .....

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d those which are unfit for reissue are destroyed after processingshredded. The same is the case with coins. The coins withdrawn are sent to the Mints for melting. From where can the general public obtain bank notes and coins? Bank notes and coins can be obtained at any of the offices of the Reserve Bank and at all branches of banks maintaining currency chests and small coin depots. Current Issues Why are the coins and bank notes in short supply? This is not entirely correct. It is true that til .....

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nce instruments such as, cheques, credit and debit cards, electronic funds transfer gain popularity, the demand for currency is expected to go down. Meanwhile, are some steps being taken to increase the supply of bank notes and coins? Yes, several steps have been taken to augment the supply of bank notes and coins. Some of these are: The existing note printing presses and the mints owned by the Government are being modernised. Two new currency printing presses with the state-of-the-art technolog .....

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d ₹ 5 notes not being printed? Volume-wise, the share of such small denomination notes in the total notes in circulation was as high as 57 per cent but constituted only 7 per cent in terms of value. The average life of these notes was found to be around a year. The cost of printing and servicing these notes was, thus, not commensurate with their life. Printing of these notes was, therefore, discontinued. These denominations were, therefore, coinised. However, it has been decided that notes .....

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ch notes be exchanged for value? Yes. Soiled notes can be tendered at all bank branches for and exchange obtained. How much value would one get in exchange of soiled or mutilated notes? Full value is payable against soiled notes. Payment of exchange value of mutilated notes is governed by the Reserve Bank of India (Note Refund) Rules, 1975. These Rules have been framed under Section 28 of the Reserve Bank of India Act, 1934. The public can get value for these notes as laid down in the Rules, aft .....

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the major portion of the number, i.e., the prefix and three digits or four digits of the number in notes up to and inclusive of ₹ 5; in respect of notes of ₹ 10 and above, where this inadequacy is present at both the numbering panels. cancelled by any office of the Reserve Bank or against which the value has already been paid found to be forged deliberately cut, mutilated or tampered carrying extrinsic words or visible representation intended to convey or capable of conveying any me .....

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and pay value in respect of mutilated notes, in terms of the Reserve Bank of India (Note Refund) Rules, 1975. The RBI has also authorised all commercial bank branches to treat certain notes in two pieces as soiled notes and pay exchange value. Features of Contemporary Bank Notes What are the general features of bank notes currently in circulation? Rs.10, ₹ 20, ₹ 50 and ₹ 100 notes issued earlier and which are still in circulation contain the Ashoka Pillar watermark and Ashoka .....

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ut? The central banks the world over bring in some change in the design of their bank notes. This is primarily to make counterfeiting difficult. India also follows the same policy. Are there any special features introduced in the notes of Mahatma Gandhi series? The new Mahatma Gandhi series of notes contain several special features vis-à-vis the notes issued earlier. These are: i) Security thread: ₹ 10, ₹ 20 and ₹ 50 notes contain a readable but fully embedded security w .....

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ipt, '1000' and 'RBI'. Notes issued earlier have a plain, non-readable fully embedded security thread. ii) Latent Image: A vertical band behind on the right side of the Mahatma Gandhi s portrait, which contains a latent image, showing the denominational value 20, 50, 100, 500 or 1000 as the case may be. The value can be seen only when the note is held on the palm and light allowed to fall on it at 45° ; otherwise this feature appears only as a vertical band. iii) Microletteri .....

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