… lowers the INR monthly quota until further notice
Currency: In the wake of the Indian government’s call to withdraw the legal tender status for INR 500 and INR 1,000 denominations issued till now, the Royal Monetary Authority (RMA) has issued a notification to minimise the inconvenience.
The governor of the central bank, Dasho Penjore, said whatever INR the RMA, banks and the public have in the denomination of 500 and 1,000 will be collected and surrendered to the Reserve Bank of India (RBI) through the State Bank of India (SBI). Equivalent amount of fresh notes, which are yet to be issued, would be released back.
He said that the central bank respects the Indian policy, which is very important to curb money laundering. While it may cause inconvenience to the public, he said that the notification is a way to resolve problems and clear doubts.
The governor said that the country has enough rupee reserve of INR 27B but since most stocks are in the denomination of 500 and 1,000, until the fresh notes come in the INR limit is brought to Rs 10,000 a person a month from Rs 50,000.
“This is just a temporary arrangement. Once the new notes arrive, everything will be brought back to business,” Dasho Penjore said.
However, there is no limit and uninterrupted services on cash-less transactions including cheques, demand drafts, credit and debit cards, and electronic fund transfer mechanisms.
The governor urged Bhutanese to be wary of people trying to solicit exchange of notes as it could turn out to be fraud. He added that Bhutanese should limit their travel to India unless necessary for the time being. Even if people choose to travel, they are urged to use the INR pre-paid card.
As per the notification, old high denomination INR bank notes can be deposited into personal bank accounts till the close of business hours on 15 December, 2016.
Bank of Bhutan has specified that exchange would be entertained only in branches equipped with fake notes detecting machines.
There will not be any limit on the quantity to be credited to the Ngultrum account of the tenderer maintained with the bank, as long as it is legal.
The Indian government came up with this initiative to curb financing of terrorism through the proceeds of fake Indian currency notes and use of such funds for subversive activities such as espionage, smuggling of arms, drugs and other contrabands into India, and for eliminating black money.
It has been decided to cancel the legal tender character of the high denomination bank notes of 500 and 1,000 effective from November 8.
While the total number of bank notes in circulation in India rose by 40 percent between 2011 and 2016, the increase in number of notes of Rs 500 denomination was 76 percent and 109 percent for Rs 1,000 note.
New Series bank notes of Rs 500 and Rs 2,000 denominations will be introduced for circulation from today.
The old Rs 500 and Rs 1,000 notes are now just worthless piece of papers.
The old notes will be accepted till Friday at government hospitals, ticket counters of railways, public transport and airlines, milk booths, petrol stations and crematoriums in India.
Meanwhile, more Indian nationals across the border are trying to use Rs 500 and Rs 1,000 notes to buy goods from the shopkeepers in the bordering towns.