SBN Ready Reckoner: Instructions Related to Exchange of Specified Bank Notes
Consequent to the withdrawal legal tender status of Rs. 500 and Rs. 1000 notes, RBI has provided various instructions to banks for strict compliance. Details as to how banks are ensuring such instructions are compiled and provide below as an SBN Ready Reckoner.
Various ceilings with regard to cash transactions are furnished in the article Specified Bank Notes (SBN) and Stipulations for SBN Exchanges.
The details in the SBN Ready Reckoner are compiled as at 5.00 PM (IST), Dec 7,2016.
Can general public exchange SBNs over the counter?
SBNs cannot be exchanged any more over the counter of banks. Customers of banks can deposit SBNs into their accounts. If a person has no bank account, he has to open an account with a bank of his preference and deposit SBNs into the account. Exchange of banknotes in Rs. 500 and Rs. 1000 denominations can be done at the counters of the Reserve Bank upto the limit stipulations announced by RBI from time to time.
Should banks insist for PAN card from the customer for various transactions?
a. For the purpose of deposit to the account of the customer held with the Bank :
i. No documents are required If the amount is less than Rs. 50,000/-
ii. If the amount is more than Rs. 50,000/-, it can be accepted only in accounts which are KYC complied. PAN card submission is also compulsory, as per extant IT rules. If the customer has no PAN card, Form 60 should be collected.
iii. For Either or Survivor / Joint accounts, PAN number of first holder is required. If the customer is not a PAN card holder, Form 60 by the first holder of the account is mandatory for remittance above Rs.50,000/-. PAN card or Form 60 submission by second holder is invalid.
There is no limit for acceptance of cash, if the account is KYC complied account and PAN card copy of the account holder/first account holder is submitted. However, many banks are allowing remittance with Form 60 only in the base branch.
Can banks accept cash deposits to cash credit/ working capital accounts or other loan accounts?
Yes, by following the above stipulation with regard to quantum of remittance.( Please refer the detailed narration given under ‘Should banks insist for PAN card from the customer for various transactions?’ in the SBN ready Reckoner.)
Whether banks are required to keep separate record for the remittance in SBNs?
Banks are not required to keep any separate records, but they are provided with a link for updation of remittance in SBNs and the same should be updated. Many banks have integrated said system with the CBS software itself.
How do banks know whether a customer has withdrawn more than the stipulated amount per day/ per week?
Almost all banks are now working on core banking systems. Necessary arrangements are made in their software. Hence, the computer system will not permit any amount beyond the specified cut off limit.
How are the weeks calculated?
The weeks are calculated from 10-16, 17- 23, 24-30, November, 2016 and from 1-7, 8- 14 December 2016 and so on.
How banks are carrying out loan disbursements?
Loan disbursement in cash was being allowed only in certain category of loans. In such categories, cash disbursal upto Rs. 24,000/- is permitted at present. Banks are now crediting the proceeds of loans to the account of borrower or borrower can operate the loan account by transfer of funds through cheques/RTGs/NEFT/Demand draft.
Can a customer withdraw any amount from his overdraft/ cash credit account?
No. For withdrawal of cash from overdraft/cash credit account, stipulation is same as that applicable to current account. The weekly limit of withdrawal is restricted to current and ODD/CC accounts which are operative for more than 3 months only.
Can a customer remit any amount to his loan account or other operative account?
Yes. Any amount can be remitted if KYC is updated in the account and PAN submitted.
Can a customer withdraw any amount of cash from ATMs?
No. The daily limit on withdrawal from ATMs is Rs.2,500/- per day in the recalibrated ATMs and Rs.2,000/- in non-recalibrated ATMs. Other ATMs will dispense Rs.50/- and Rs.100/- bank notes until they are re-calibrated. Almost all banks have furnished details of recalibrated accounts in their web site for customer convenience.
Can banks accept SBNs in fee collection/CMS accounts?
No. Only legal tender notes can be accepted towards such accounts. However, customers may remit SBN in own account and then transfer funds to fee collection/CMS account.
Are banks treating employees of firms/ institutions having current accounts as third party for remittance of cash?
If the bank is convinced that the remitter is an employee of the firm/ institution or the cash remittance slip is signed by the authorized signatory, then the remitter need not be treated as third party.
Do banks collect currency notes issued prior to 2005?
Specified banknotes (SBN) include pre 2005 banknotes in the denominations of Rs. 500 and Rs. 1000 and hence banks are authorized to accept them too.
Are banks monitoring cash deposits to accounts?
Banks are instructed to report details of cash remittances aggregating to Rs. 12.5 Lakh or more, in one or more current account of a person or Rs. 2.5 Lakh or more in one or more account (other than current account) of a person during the period 09.11.2016 to 30.12.2016. Individual branches may not be monitoring such details. Such details will be collected centrally by each bank and reported to the Income tax department by 31.01.2017.However, customers need not worry if the remittance is bonafide as they can answer any clarifications sought by IT department .
What is the cash withdrawal limit for farmers and Traders Registered with APMC Markets/ Mandis?
Farmers are allowed to draw upto a maximum of Rs.25,000/- per week in cash from their loan (including Kisan Credit Card limit) or KYC complied deposit accounts. Traders Registered with APMC Markets / Mandis are allowed to withdraw, in cash, upto a maximum of Rs. 50,000/- in a week from their KYC complied current account and are operational for the last three months or more.
What is the cash withdrawal for the purpose of wedding?
If the date of marriage is on or before December 30, 2016 a maximum of Rs.2,50,000/- is allowed to be withdrawn from the bank deposit accounts till December 30, 2016.
* Withdrawal from the account of either of the parents or the person getting married.
* The amount available in the account at the close of business on 8th November 2016 only can be withdrawn.
* Evidence of the wedding, including invitation card, copies of receipts for advance payments made, such as marriage hall booking, advance payments to caterers, etc. are to be submitted. A detailed list mentioning names of persons to whom the cash withdrawn is proposed to be paid, along with a declaration from such persons that they do not have a bank account also should be submitted if the proposed payment is Rs.10,000/- or more. The list should indicate the purpose for which the proposed payments are being made and the declaration shall contain full address along with the mobile number of such persons.
What is Small Savings Scheme account? Is BSBDA a Small Saving Scheme account?
Public Provident Fund (PPF), National Savings Certificates (NSC), Senior Citizen Savings Scheme (SCSS) Account, Post Office Saving Schemes, and Kisan Vikas Patra (KVP) etc are classified under Small Savings Scheme. Subscribers of Small Savings Schemes are not allowed to deposit SBNs in Small Savings Schemes. BSBDA is not a Small Saving Scheme account.
Are banks authorized to collet SBNs from religious institutions?
Banks are instructed to accept Specified Bank Notes (SBN) from places of worship which receive contributions from devotees through hundis, boxes etc. Such remittances can be made only in base branches and no declaration is required for such remittances. No limit is stipulated for cash deposit if PAN is updated. If PAN is not provided, the religious institution has to submit duly filled form 60. If the amount entered in the column 22(b) of form 60 exceeds the taxable income, then banks cannot accept remittance with form 60.
Can a customer buy Gold coins or gift cards or insurance policy by remittance of SBNs?
SBNs can be deposited in account of the customer and then fund has to be transferred to carry out said transactions
How do banks manage payment of funds received through Exchange Houses?
Cash remittances from exchange houses such as Western Union, Xpress Money etc. to individuals are as far as made as Transfer transactions. The amount can be credited to the customer’s account with the branch. Alternately, it can be send through NEFT for credit to customer’s account with other banks.
Can banks allow cash withdrawal from the accounts of Urban Co-operative without ceiling?
The cash withdrawal limit of ₹ 50,000/- per week is not applicable to withdrawal of cash by an Urban Co-operative Bank from its account with any other bank. Branches can permit withdrawal of cash by Urban Co-operative Banks from their accounts based on need.
What about withdrawal of cash by customers from their accounts with District Central Co-operative Banks?
District Central Cooperative Banks are permitted to allow their existing customers to withdraw money from their accounts upto Rs. 24,000/- per week. However, no exchange facility against the specified bank notes or deposit of such notes should be permitted. The cash withdrawal limit of Rs.24,000/- per week is not applicable to withdrawal of cash by a DCCB from its account with any other bank.
What are the conditions for cash withdrawal without ceiling?
Banks are permitted to allow deposits made in current legal tender notes on or after November 29, 2016 beyond the stipulated limits of Rs. 24,000/ 50,000. Preferably higher denominations bank notes of Rs.2,000/- and Rs.500/- are to be issued to such withdrawals.
CelebrateBanking.com expects that the SBN Ready reckoner has succeeded in clarifying your doubts.
