Nepal bans use of Indian currency notes of Rs 2000, Rs 500 and Rs 200
The Nepal government has banned the use of Indian currency notes of Rs 2,000, Rs 500 and Rs 200 denominations, according to a media report. The government has asked the people to refrain from keeping or carrying Indian bank notes higher than Rs 100 denomination as it has not legalised them, The Kathmandu Post quoted Minister for Information and Communications Gokul Prasad Baskota as saying.
The decision can affect Nepalese labourers working in India as well as Indian tourists visiting Nepal.
The Indian government introduced notes of Rs 2,000, Rs 500 and Rs 200 denominations after demonetisation in 2016. People have been using new Indian currency notes in the Nepali market for nearly two years.
Know these new exchange rules about Rs 200, Rs 2000 Notes
Post demonetization, the exchange of the Rs 2000 or Rs 200 currency notes, had become a severe issue to those who possessed mutilated notes.
Many had complained of receiving soiled notes, but the banks refused to exchange them, stating that they did not have permission from the Reserve Bank of India (RBI) to do so. However, the latest notification by the RBI brings some clarity and relief.
Here’s all you need to know about it:
1. The Rs 2000 note was released over two years ago after the demonetisation reform, while the Rs 200 note was released in September 2017. The exchanging of notes falls under Section 28 of the RBI Act. Before the latest gazette, there was no provision specifying the rules for exchange of the new denominations. This is why the banks could not lawfully change the notes.
2. Notes with even minor deformities could not be exchanged, and the RBI had written to the Ministry of Finance to update rules for the new denomination notes. Earlier this week, the RBI received the due clearance and has issued the new guidelines, saying, “it has been done to enable the public to exchange mutilated notes in Mahatma Gandhi (New) series, which are smaller in size compared to the earlier series.”
3. According to the RBI, the exchange rate for a mutilated note will depend on the damaged area.
You might end up getting half the value or even less in a refund where the notes are damaged more than the specified area.
4. For a Rs 200 note, the minimum undamaged area required is 78 sq cm (the area of the note is 96.36 sq cm) for refund payment of full value. The minimum unsoiled area for refund payment of half the value is 39 sq cm.
5. To receive the full payment in a refund for a Rs 2000 note, the minimum undamaged area is 88 sq cm where the area of the note is 109.56 sq cm. For a refund of half the value of the note, the minimum area required is 44 sq cm.
6. The criteria for both the above rules specify that the dimensions are “the undivided area of the single largest piece of the note.”
7. You can refer to the link here to know the rules to exchange notes of other denominations.
99.3 Percent of demonetised notes returned to Banks: RBI
As much as 99.3 per cent of the junked Rs.500 and Rs.1,000 notes have returned to the banking system, the RBI said today, indicating that just a miniscule percentage of currency was left out of the system after the government's unprecedented note ban aimed at curbing black money and corruption.
The Reserve Bank of India (RBI), which has taken an awfully long time to count the currency that was returned in the limited period window provided by the government to exchange or deposit the demonetised currency, said in its Annual Report for 2017-18 that the exercise is finally over.
Of the Rs.15.41 lakh crore worth Rs.500 and Rs.1,000 notes in circulation on November 8, 2016, when the note ban was announced, notes worth Rs.15.31 lakh crore have been returned.
This meant just Rs.10,720 crore of the junked currency did not return to the banking system.
After the note ban, old junked notes, called specified bank notes, were allowed to be deposited in banks with unusual deposits coming under income tax scrutiny.
The "humungous task of processing and verification of specified bank notes was successfully achieved," it said.
The specified bank notes received were verified, counted and processed in the sophisticated high speed currency verification and processing system (CVPS) for accuracy and genuineness and then shredded, it added.
RBI said the processing of specified bank notes has since been completed. "The total specified bank notes returned from circulation is Rs.15,310.73 billion."
A collateral damage as a result of rise in printing and other cost was dividend RBI pays to the government.
The government replaced old Rs.500 notes with new ones, but no replacement for Rs.1,000 notes have been made. Instead, a new Rs.2,000 notes were introduced post note ban.
Post-demonetisation, RBI spent Rs.7,965 crore in 2016-17 on printing new Rs.500 and Rs. 2,000 and other denomination notes, more than double the Rs.3,421 crore spent in the previous year.
In 2017-18 (July 2017 to June 2018), it spent another Rs.4,912 crore on printing of currency, the annual report said.
The demonetisation was hailed as a step that would curb black money, corruption and check counterfeit currency but RBI said, "Counterfeit notes detected in specified bank notes decreased by 59.7 and 59.6 per cent in the denominations of Rs.500 and Rs.1,000, respectively."
"Compared to the previous year, there was an increase of 35 per cent in counterfeit notes detected in the denomination of Rs.100, while there was a noticeable increase of 154.3 per cent in counterfeit notes detected in the denomination of Rs.50," RBI said adding that counterfeit notes detected in the new Rs.500 and Rs.2,000 notes during 2017-18 were 9,892 and 17,929 as against 199 and 638, respectively, during the previous year.
RBI to issue new Rs 100 notes shortly, know features
The Reserve Bank of India (RBI), in a notification, said that it will issue new Rs 100 notes under the 'Mahatma Gandhi (New) Series' shortly.
The new Rs 100 notes will be lavender in colour and has motif of
“RANI KI VAV” (a stepwell situated in the town of Patan in Gujarat) on
the reverse. The dimension of the new banknote will be 66mm x 142mm.
The new Rs 100 notes will bear the signature of the Reserve Bank
governor Urjit Patel. The RBI said that the printing and supply of Rs
100 notes for distribution to public through the banking channel will
gradually increase.
Here are the salient features of the Rs 100 note:
Obverse (Front):
* See through register with denominational numeral 100
* Latent image with denominational numeral 100
* Denominational numeral 100 (written in Devnagari)
* Portrait of Mahatma Gandhi at the centre
* Micro letters ‘RBI’, ‘Bharat’ (in Devnagari), ‘India’ and ‘100’
* Windowed security thread with inscriptions ‘Bharat’ (in Devnagari)
and RBI with colour shift; colour of the thread changes from green to
blue when the note is tilted
* Guarantee clause, governor’s signature with promise clause and the RBI emblem towards right of Mahatma Gandhi portrait
* Ashoka Pillar emblem on the right
* Mahatma Gandhi portrait and electrotype (100) watermarks
* Number panel with numerals in ascending font on the top left side and bottom right side
* For visually impaired intaglio or raised printing of Mahatma
Gandhi portrait, Ashoka Pillar emblem, raised triangular identification
mark with micro-text 100, four angular bleed lines both on the right and
left sides
Reverse (Back):
* Year of printing of the note on the left
* Swachh Bharat logo with slogan
Language panel
* Motif of "RANI KI VAV"
* Denominational numeral 100 (in Devnagari)
All the banknotes in the denomination
of Rs 100 issued by the Reserve Bank in the earlier series will continue
to be legal tender, the central bank added.
RBI’s new cash management norms hike banks’ costs
With the Reserve Bank of India’s (RBI’s) new standards for cash
logistics companies kicking in from July 6, some lenders are raising the
issue of higher costs and are making a case for higher inter-bank
payments for use of automated teller machines (ATMs). On April 6, 2018, the RBI
had come out with new prescriptions for companies that undertake cash
services on behalf of banks. The guidelines were to come in force within
90 days.
Under the new norms, lenders must
ensure that they engage service providers and their sub-contractors with
a net worth of at least Rs 100 crore. In case of existing agreements,
banks have to ensure that the net worth criteria is met by March 2019.
Cash logistics companies need to have a minimum fleet size of 300
specifically fabricated cash vans. These vans should be equipped with GPS, tubeless tyres, an emergency hooter and CCTV covering both passenger and cash compartments.
Rituraj Sinha, group managing director, SIS Group,
said, “The guidelines were much needed, in fact overdue. A working
group created by the Indian Bank Association in 2013-14 had first
highlighted the pressing need for regulating cash logistics operations.
Currency logistics is completely outsourced by banks and demonetisation
highlighted the vital role of private cash logistics operators in the
currency management ecosystem.”
He added that while in the short term
they are likely to push up cost of operations, in the long term they
will save money by improving efficiency and reduce fraud. “The RBI
guidelines are benchmarked with global standards. Currency management is
regulated in most major economies by the central bank,” he added.
According to banks, the RBI also wants
lenders to discontinue open cash replenishment and top-up in ATMs.
Instead, it has asked banks to use lockable cassettes in their ATMs
which shall be swapped at the time of cash replenishment. This move
comes after a couple of incidents where personnel in charge of cash
refilling replaced banknotes with play money. A bank official said,
“Shipping cassettes instead of cash would mean lesser quantity in every
cash van.” It will also increase the transit cycle as cash will have to
be moved from currency chests to bank vaults to refill the cassettes.
High-value notes reason for cash crunch, says bank body
All India Bank Officers Confederation (AIBOC) has said that the present cash crunch is due to dependency on high-value currency notes of Rs 2,000 and Rs 500.
Hoarding of Rs 2,000 notes began after the Reserve Bank of India (RBI) stopped printing it and has precipitated into a cash crunch. Ravinder Gupta, the Delhi circle head of AIBOC told India Today TV that the cash crunch situation will take at least 7-10 days to normalise.
The AIBOC office bearer said that as per the data released by the RBI out of the total currency in circulation -- Rs 18.43 lakh crore -- close to 90 per cent is in Rs 2,000 and Rs 500 notes.
While smaller notes of Rs 100, Rs 50 and other denominations constitute a very small proportion yet remain in high demand by common people.
"When the RBI stopped printing Rs 2,000 notes, those hoarding money got a whiff of it and began accumulating these notes; this is the reason why Rs 2,000 notes are fast going out of circulation," Gupta said.
Experts suggest that Rs 2,000 notes are a favourite with hoarders and the government is aware of this. And that's one of the reasons why RBI has stopped printing these high-denomination notes.
Despite the cash crunch the RBI has made it clear that it will not resume printing of these notes. Instead the government has announced that Rs 500 notes worth Rs 2,500 crore will be printed per day instead of Rs 500 crore printed now.
AIBOC has blamed the RBI for the cash crunch. "The inequitable distribution of cash has lead to shortage in some states; Bihar, Gujarat are not poll bound but are facing cash crunch. This is as a result of poor management of cash," said Gupta.
All the designs of Rs 10 coin are valid and legal tender : RBI
It has come to the notice of the Reserve Bank that in certain places
there is reluctance on part of traders and members of public to accept Rs. 10 coins due to suspicion about their genuineness.
All the 14 designs of Rs. 10 coin are valid and legal tender for
transactions, the Reserve Bank said today amid reluctance by certain
traders to accept the coins. “It has come to the notice of the Reserve
Bank that in certain places there is reluctance on the part of traders
and members of the public to accept Rs. 10 coins due to suspicion about
their genuineness,” the RBI said while reiterating the legal tender
status of coins of different designs.
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