India’s decision to demonetise Rs500 and Rs1,000 notes may spell hardships to many expatriates, but the country’s top bank said the recourse for non-resident Indians (NRIs) is to deposit the specified bank notes to their non-resident ordinary rupee (NRO) account.
The country’s central bank – Reserve Bank of India issued a clarification to the effect.
Speaking to Gulf Times from Hyderabad, State Bank of India’s chief general manager, S.Adikesavan said while NRIs can deposit the demonetised notes in their NRO accounts with banks in India, they cannot deposit cash in their NRO account from a foreign country.
“The recourse will be to deposit the money once back in India,” Adikesavan said.
Adikesavan also said the RBI has directed all banks in India to work on November 12 and 13 (Saturday and Sunday) in view of the anticipated heavy rush for banking transactions.
Meanwhile, a source said NRIs with non-resident external (NRE) account can easily open an NRO account, if they don’t have one already.
“Opening an NRO account shouldn’t be a problem for NRE account holders,” the source said.
RBI in a communique said those who are outside the country could get their exchanges done by authorising (in writing) another person in the country to deposit the notes into their bank accounts with the authority letter and identity proof such as Aadhaar card, driving license, voter ID card, passport, NREGA card, PAN card etc.
Until December 30, the scrapped notes can be exchanged at the branches of commercial banks, regional rural banks, urban cooperative banks, state cooperative banks and special RBI counters.
Beyond this period and until March 31 next year, the banned notes can be exchanged only at designated RBI counters.
The Reserve Bank of India said the most important reason for the ban was the abnormal rise in fake currencies of higher denomination, and also the higher incidence of black money in the system, but assured the public that a person who changed his higher value cash will get exactly the equal amount in lower denominations.
The fake notes are used for anti-national and illegal activities. High denomination notes have been misused by terrorists and for hoarding black money.
India’s Finance Minister Arun Jaitley said the country’s decision to withdraw Rs 500 and Rs 1000 notes will move the country towards a “cashless” economy. He also attempted to reassure people that those who had lawful money would have nothing to fear.
Jaitley said, "This is a major setback to the parallel black money economy because a lot of currency operating outside the system will now have to be brought into the banking system... The government believes that this decision has been welcomed everywhere. This major step with help India's credibility," he said.