Urjit Patel, governor of the Reserve Bank of India. (Photographer: Dhiraj Singh/Bloomberg)

RBI Probably Changes Rules More Frequently Than You Visit The ATM

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  • A change in regulations on withdrawals, exchange, and deposits of currency once every three days. That’s the average run rate the Reserve Bank of India (RBI) has maintained since Narendra Modi, announced the demonetisation scheme just under six weeks back.

    Some may argue that most of these took place in November, but the sheer number of flip-flops in regulations, has left a lot of people confused.

    The latest change has come just 10 days before the deadline for depositing old Rs 500 and Rs 1000 notes in banks. On Wednesday, the central bank reversed its order passed two days ago and provide relaxation for fully KYC compliant account holders. The RBI said that these accounts will no longer be required to provide a “satisfactory explanation” to two bank officials if one has to deposit more than Rs 5,000 in scrapped notes from till December 30.

    Here’s a list of just how many times, and how many new rules have been brought in since November 8.

    November 8: Prime Minister Modi announces that Rs 500 and Rs 1,000 notes are scrapped.
    You were told that you could exchange these for Rs 4,000 at bank branches.

    November 10:
    Withdrawal limit set at Rs 10,000 per day, and Rs 20,000 per week.

    November 11: RBI assures you that you have enough time to exchange your old notes.

    The Reserve Bank appeals to members of public to be patient and urges them to exchange their old notes at their convenience, any time before December 30, 2016.
    RBI’s November 11 Notification 

    November 12: The RBI once again calls for calm.

    November 13: Exchange limit raised to Rs 4,500 per day.
    Daily ATM withdrawal limit increased to Rs 2,500 per day from Rs 2,000 in recalibrated ATMs.
    Withdrawal limit from branches increased to Rs 24,000 a week; daily limit removed.

    November 14: District Central Cooperative bank customers can withdraw Rs 24,000 per week, but cannot exchange old notes for new ones, or deposit old notes.

    Current account holders can withdraw Rs 50,000 per week.

    November 15: At this point customers may have got inked. Banks started using indelible ink to identify people queuing up to exchange old notes.

    November 17: Exchange limit changed for the third time, reduced to Rs 2,000 per day.

    November 18: Cash withdrawal through point-of-sale systems across all cities made uniform at Rs 2,000 per day per account.

    November 21: If you were getting married, you were allowed a maximum of Rs 2,50,000 to be withdrawn from a single account. But one had to provide a whole host of reasons to prove that you needed the cash for your wedding.

    Current, overdraft and cash-credit accounts, which were operational for three months or more, allowed to withdraw up to Rs 50,000 in cash per week.

    November 23: RBI said scrapped notes would not be accepted as deposits in small savings accounts.

    November 24: RBI changes exchange norms for the fourth time, scraps the facility altogether at bank branches.
    It issued a separate statement saying you could continue to exchange your old notes at one of its branches.

    November 25: Foreign citizens allowed to exchange their currency notes up to a limit of Rs 5,000 per week till December 15.

    November 28: RBI said it would allow withdrawals beyond the stipulated limit if one deposited legal currency.

    December 19: The customer now needs to explain the delay in depositing old Rs 500 and Rs 1,000 notes.

    December 21: The RBI changed the December 19 order, and exempted fully KYC-compliant bank accounts from the Rs 5,000 cap.

    BloombergQuint