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In a much applauded move Prime Minister Narendra Modi's government decided to "kill" the 500 and 1000 rupee notes. Some of the notes in circulation were supposedly fake and some of it used to fuel the underground economy (a.k.a "black money" )
"Brothers and sisters, to rid this country of the termite-like corruption and black money, it has become essential to take one more tough step. Starting midnight tonight, that is, on the midnight of November 8, 2016, the current currency notes of denominations of rupees 500 and rupees 1,000, will no longer remain legal tender. These currencies will become legally invalid."
NRIs and visitors to India probably have some 500 and 1000 rupee notes left over from previous trips are probably wondering what to do with the notes.
First things first. What will NOT work
- Panicking about this is not going to help. Unless you have stashed away hundreds of thousands of rupees in 500 and 1000 rupee notes in your bedroom or bank locker overseas, there is no reason to panic.
- If you had a lot - hundreds of thousands - of currency notes with you while traveling overseas, ask yourself:
- Has the money had already been taxed in India? If yes, just hold on to the currency till your next trip back to India and follow RBI guidelines ( check out Indian Governemtn statement )
- On the other hand, If the money had not been taxed, or it was a "cash payment" you received, ask yourself if you should just count your losses and walk away.
- As per RBI regulations, Foreigners and Indians are not legally "allowed to carry any Indian notes with them." Although the rule, which is part of Foreign Exchange Management Act (FEMA), has been in place for quite sometime now, it is only now that the central bank is trying to enforce it.
- If you walk into an Indian Embassy or Consulate overseas with a suitcase full of 500 or 1000 rupee notes, you could be in trouble!
- Branches of "Indian" banks like State Bank of India, ICICI and other banks in the US and Canada operate as local banks. They are not authorized to operate your "Indian" NRI or NRO accounts. Therefore, they will not take your 500 or 1000 rupee notes for deposit.
- Currency exchange ( money-exchange ) outlets in foreign countries may NOT accept the old 500 or 1000 rupee notes. There are already accounts in media that commercial money exchange outlets overseas have reportedly refused to accept the old 500 and 1000 notes.
Here are a few facts and practical tips for NRIs, left with "some" Indian currency in hand:
- Carry the cash with you to India: According to a press release by India's Ministry of Finance, individuals can exchange the old notes till December 30, 2016.
- If you have some money left back in India, you could authorize another person in India to deposit the notes: According to RBI guidelines, if you have old banknotes in India, others may be authorized to deposit the notes into your Non-Resident Ordinary (NRO) or Non-Resident External (NRE) bank account. The authorized person should go to the bank branch with the old banknotes and authorization letter from you. He or she should also carry a valid Indian identity proof
- Send the rupees back to India with someone you trust. If the person is traveling before end of 2016, he or she can deposit it into your account (similar to step 2)
If None of these OPTIONS are suitable?
If none of the above options are suitable to you, there may still be an option made available, states India's Ministry of Finance. In a press release, the statement says, "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."
Other tips from bloggers and media:
- 4 ways Non Residential Indians (NRIs) can change their 500 and 1000 rupee notes -sbs.com.au
- What can NRIs do with their old Rs500, Rs1,000 notes? An NRI can deposit the old Rs500 and Rs1,000 currency notes to his non-resident ordinary rupee (NRO) account, according to RBI guidelines. For the non-resident Indians (NRIs) who keep Indian currency, the move to demonetize Rs500 and Rs1,000 notes may spell hardships. As per the clarification issued by the Reserve Bank of India, the recourse for an NRI is to deposit the specified bank notes (Rs500 and Rs1,000) to his non-resident ordinary rupee (NRO) account. “But what happens if the person doesn’t have the bank branch in her country of residence? And more importantly will the foreign branch accept rupee notes? These are some questions that NRIs will struggle with,”said Gautam Nayak, a chartered accountant. “Also an NRI can’t keep more than Rs25,000 in currency so that also needs to be kept in mind,” he added. According to Jose K. Matthew, head-retail business, Federal Bank Ltd; an NRI cannnot deposit cash in NRO account from a foreign country. (livemint)
- What NRIs in UAE should do with Rs500, Rs1,000 notes? Resident Indians and expatriates were taken by surprise last night when the Indian Prime Minister announced the demonetization of 500 and 1,000 rupee notes with immediate effect. Several non-resident Indians, especially in the UAE, who frequently travel to their home country, scurried to the nearby exchange houses to get the currency converted. But large exchange houses in the UAE are not accepting any Indian currency as of now. (KaleejTimes)
- If you are an NRI and had carried some money with you when you flew out of India, what do you do? I had a few 500 Rupees with me and was wondering what do to with it? Will it go invalid if I take them back to India? "There is some clarity on the issue finally from reliable sources that NRIs who are currently out of India (traveling or working abroad) will get a chance to convert the 500 and 1000 Rupee notes at selected RBI offices before March 2017. Although the list of RBI offices that will accept this is still unclear. Also, this will be considered an extra ordinary circumstance and NRIs will have to provide proof/evidence that you were abroad during this time (from Nov 2016 to whenever you are converting) on work, travel etc.manikarthik.com
- If you’re outside India and been wondering how to get your 500 and 1000 Rupee notes - indoindians.com
- Modi’s ‘Masterstroke’ Cash Ban to Boost India Digital Push - mydigitalstartup.net
What to do in Future?
According to TOI, NRIs, foreigners can’t leave with rupee: Thanks to a new directive from the Reserve Bank of India (RBI), from now on every non-resident Indian (NRI) and foreigner leaving the country will have to compulsorily change Indian rupees in their possession into a foreign currency before they board the flight. It's a common practice among NRIs to carry some amount of Indian currency with them when they leave the country, mainly for the convenience of not having to exchange forex into rupee when they return the next time. But from now on, they will not be allowed to carry any Indian notes with them.
Although the rule, which is part of Foreign Exchange Management Act (FEMA), has been in place for quite sometime now, it is only now that the central bank is trying to enforce it. On Monday, RBI allowed forex changers to open kiosks beyond the immigration desks at international airports to facilitate NRIs and foreigners opting to exchange rupee for other currencies before they enter the aircraft. According to RBI officials, in case these travellers have Indian currency notes in their possession before boarding the flight, Indian customs officials can act against them.