RBI starts crediting money to NRI's who deposited old notes

India’s demonetization process unsettled the country leading to decline of the country's GDP and its industrial production. In a belated effort to smooth matters, India recently stipulated a grace period where both residents and non-resident Indians (NRIs), or people having Indian passports, could deposit their old Rs.1,000 and Rs. 500 banknotes at RBI offices across the country. For resident citizens, who were abroad during the demonetisation period, the current window for exchange is till 31 March 2017. For NRIs, it is available until 30 June 2017.

To that end, the Reserve Bank of India (RBI) set up facilities at its five offices, Mumbai, New Delhi, Chennai, Kolkata and Nagpur to help NRIs and Indian citizens exchange their former banknotes of the Mahatma Gandhi Series while the grace period lasts.

While resident Indians are able to exchange unlimited amounts, NRIs are controlled by regulations of the Foreign Exchange Management Act, 1999 (FEMA). Existing regulations allow NRIs to carry up to Rs 25,000 overseas.

To make use of the facilities, you need to show ID documents, such as your Aadhaar number, and Permanent Account Number (PAN). You also need to provide evidence showing you were abroad during the period, as well as your Customs declaration form that deals with Specified Bank Notes (SBNs). Finally, you have to verify this is your first time using the service. In fact, you’re only allowed to use the service once.

In an email, an official of RBI explained:

"The process involves verification of [the participant's] know-your-customer (KYC) status, and their not availing the exchange services during the normal window. This process takes several weeks… While we regret the delay, the time taken was needed to complete the verification process."

Naturally, the problem is that this service may be too little, too late. Some visitors complain that the facilities are understaffed and too few. One NRI said he visited RBI Delhi to deposit some cash. This was his story:

"I reached at 11 am and wasn't even able to get inside the main gate of the office till 2.30 when they closed. ...I have no idea how many hours it takes after you get in. But the speed clearly suggested that RBI is thinly staffed for handling such a large nationwide activity in just 5 offices. Most likely there were touts running the show inside or there were no more than 2-3 people working on this, else the line couldn't be so slow moving."

Regardless. Following June 30, both residents and NRIs are only allowed a maximum of 10 former banknotes or no more than 25 notes used for study, numismatics or research. Violators pay a fine of up to Rs10,000 or five times the value of their banned notes, whichever is higher.

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