The Govt. has decided to discontinue the legal tender character of high denomination bank notes of ₹ 500 and ₹ 1000. In other words, such notes will not be a legal tender from midnight of November 8, 2016. This decision is being made to curb financing of terrorism through the proceeds of Fake Indian Currency Notes and for eliminating Black Money. Key takeaways of this decision are given hereunder:

1. You can exchange old high denomination notes of ₹ 500 and ₹ 1000 at any of the 19 offices of the RBI or at any of the bank branches or at any Head Post Office or Sub-Post Office from 10thNovember onwards till 30th December, 2016. The RBI will issue two new notes of ₹ 2,000 and ₹ 500.

2. You can go to any bank branch with valid identity proof for exchange of notes up to ₹ 4,000. Exchange of currency in excess of ₹ 4,000 (in denomination of ₹ 500 or ₹ 1,000) shall be allowed by way of credit of money into your Bank account only.

3. Withdrawal from ATMs shall be restricted to ₹ 2,000 per day per card up to 18thNovember, 2016. The limit shall be raised to ₹ 4,000 per day per card from 19thNovember, 2016.

4. You can withdraw cash against withdrawal slip or cheque subject to ceiling of ₹ 10,000 in a day within an overall limit of ₹ 20,000 in a week (including withdrawals from ATMs) up to 24th November 2016.

5. There is no restriction on any kind of payments by cheques, demand drafts, mobile wallets or debit or credit cards and electronic fund transfer.

6. The existing notes of ₹ 500/1000 can be used till 11th November, 2016 for payment in any government hospitals, to purchase bus tickets at government bus stands, train tickets at railway stations, air tickets at airports, for purchase of milk, consumable goods at Govt. authorized booths, petrol or diesel or for payment at crematoria and burial grounds or to exchange foreign currency by foreign tourists.

7. In case it is not possible for you to visit the branch you may send your representative with an express mandate, i.e. a written authorisation.

8. All ATMs, Cash Deposit Machines, Cash Recyclers and any other machine used for receipt and payment of cash shall be shut on 9thand 10th November, 2016.Banks and Government Treasuries will be closed on 9th November, 2016.

9. You can exchange notes into the account of your friend or relative if such person gives you permission in writing. While exchanging, you should provide to the bank, evidence of permission given by the account holder and your valid identity proof.

10. You can deposit notes in Cash Deposits machines/Cash Recyclers.

11. You can also deposit notes even if you are not in India by authorising another person in India to deposit the notes into your bank account. The person so authorised has to come to the bank branch with such banknotes, the authority letter given by you and a valid identity proof.

12. Foreign tourists can purchase foreign exchange equivalent to ₹ 5,000 using these notes at airport provided they present proof of purchasing such notes.

13. For those who are unable to exchange their Old High Denomination Banknotes on or before December 30, 2016, an opportunity will be given to them to do so at specified offices of the RBI by 31st March, 2017, along with necessary documentation as may be specified by the RBI.

Demonetisation of high denomination notes removes legal tender status and prescribes exchange, deposit and withdrawal procedures. Discontinuation of legal tender status for specified high denomination banknotes invalidates those notes for general payments and creates a structured regime for exchange, deposit and withdrawal through designated central bank offices, bank branches and post offices subject to identity and documentation; small over the counter exchanges are allowed while larger amounts must be credited to bank accounts, with limited exceptions for essential services and foreign tourist exchange.