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Withdrawal of Legal Tender Status for Rs. 500 and Rs. 1000 Notes: RBI Notice (Revised)

Press Releases 

Date : Nov 08, 2016

Withdrawal of Legal Tender Status for Rs. 500 and Rs. 1000 Notes: RBI Notice (Revised)

Government of India vide their Notification no. 2652 dated November 8, 2016 have withdrawn the Legal Tender status of Rs. 500 and Rs. 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016.

This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.

Starting from November 10, 2016, members of public/corporates, business firms, societies, trusts, etc., holding these notes can tender them at any office of the Reserve Bank or any bank branch and obtain value thereof by credit into their respective bank accounts.

For their immediate cash needs, these notes of value up to Rs. 4,000 per person can be exchanged for cash over the counter of these bank branches.

Public are advised to present a valid proof of identity for availing this exchange facility.

Value credited to their bank accounts can be freely used by issue of cheques or by remitting through various electronic modes of transfer like NEFT, RTGS, IMPS, mobile banking, internet banking etc. Cash withdrawals from bank accounts, over the bank counters, will be restricted to a limited amount of Rs. 10,000 per day subject to an overall limit of Rs. 20,000 a week from November 9, 2016 till end of business on November 24, 2016. The limits will be reviewed after this.

All ATMs and other cash machines will remain shut on November 9, 2016 to facilitate recalibration. When ready, they will be reactivated and cash drawals from ATMs will be restricted to Rs. 2,000 per day per card up to November 18, 2016 and the limits shall be raised to Rs. 4000 per day per card from November 19, 2016.

Any person who is unable to exchange or deposit the specified banknotes in their bank accounts on or before December 30, 2016 shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by the Reserve Bank.

For more details members of the public may visit RBI website www.rbi.org.in and Government web site www.gov.nic.in for further information and details.

Alpana Killawala

Principal Adviser

Press Release : 2016-2017/1142

New norms to deal with cheque bounce cases

The government has notified the Negotiable Instruments (Amendment) Bill, 2015 which allows filing cheque bounce cases in a court at a place where the cheque was presented for clearance and not the place of issue. The Negotiable Instruments (Amendment) Bill, 2015 was passed by Parliament in the recently concluded Winter Session. “The provisions of the Negotiable Instruments (Amendment) Act, 2015 shall be deemed to have come into force on the 15th Day of June, 2015, the day on which the Negotiable Instruments (Amendment) Ordinance, 2015 was promulgated to further amend the Negotiable Instruments Act, 1881,” the Finance Ministry said.

There are an estimated 18 lakh cheque bounce cases across the country, of which about 38,000 are pending in High Courts. Some litigants have to travel to different places from where the cheques were issued and not honoured.

The law provides that cases of bouncing of cheques can be filed only in a court in whose jurisdiction the bank branch of the payee (person who receives the cheque) lies. It will also result in fast prosecution of offenders.

The legislation also mandates centralisation of cases against the same drawer.

The Act has also repealed an ordinance which was re-promulgated earlier. The President had promulgated the ordinance twice — in June and September last year. “The Negotiable Instruments (Amendment) Act, 2015 is focused on clarifying the jurisdiction related issues for filing cases for offence committed under section 138 of the Negotiable Instruments Act, 1881,” the statement said.

The clarification of jurisdictional issues may be desirable from the equity point of view as this would be in the interests of the complainant and would also ensure a fair trial.

Source: The Times of India

RBI to move to CTS for clearing government’s cheques

RBI has decided to dispense with the requirement of physically forwarding paid central government cheques to the departments for clearance.

With a view to enhancing efficiency in cheque clearing, Reserve Bank has introduced Cheque Truncation System (CTS) for clearance of cheques, facilitating the presentation and payment of cheques without their physical movement.

Taking this initiative forward, it has now been decided in consultation with the Office of the Controller General of Accounts (CGA), Ministry of Finance, Government of India,  to dispense with current requirement of forwarding the paid Central Government cheques in physical form to the Government departments.

The practice of presenting cheques in physical form is commonly known as P2F.

The revised guidelines would be effective in respect of cheques issued by the Central Government and Union Territories (UTs) from February 1, 2016.

Click here to view the notification issues by RBI.

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