Demonetisation U-turn? RBI now turns away people wanting to exchange Rs 500, Rs 1,000 notes

New DelhiL Hundreds thronging the RBI office to exchange old Rs 500 and 1,000 notes returned empty handed as the central bank is allowing the facility only for NRIs or those who were abroad during the 50-day demonetisation period.’ Prime Minister Narendra Modi in his address to the nation on 8 November, 2016 had said, “There may be some who for some reason, are not able to deposit their old 500 or 1,000 rupee notes by 30 December, 2016. “They can go to specified offices of the Reserve Bank of India up to March 31, 2017 and deposit the notes after submitting a declaration form.“But with RBI turning away people who want to exchange old notes, it looks like another U-turn by the government on the promise the PM had made in his first speech. People were seen arguing with security guards at designated RBI branch saying that Prime Minister Narendra Modi had promised that old notes could be exchanged till 31 March, 2017 at RBI. [caption id=“attachment_3129300” align=“alignleft” width=“380”]  Reuters[/caption] Even the RBI on November 8 statement said, “Any person who is unable to exchange or deposit the specified banknotes in their bank accounts on or before December 30, 2016 shall be given an opportunity to do so at specified offices of the Reserve Bank or such other facility until a later date as may be specified by the Reserve Bank.” The central bank on December 31 designated its five offices – Mumbai, New Delhi, Chennai, Kolkata, and Nagpur – to exchange defunct currency notes post 50-day demonetisation period that ended on December 30. RBI has imposed conditions for making use of the extended facility for note exchanges. It had said that NRIs and Indians returning from abroad will have to physically show the junked 500 and 1,000 rupee notes to customs officials at the airport and get a declaration form stamped before they can deposit the demonetised currency in RBI during the grace period. Indians who were abroad during 9 November to 30 December have been given a 3-month grace period till 31 March, 2017 to deposit the junked notes, while for the NRIs, it is 6 months till June 30. While there is no limit on deposit of defunct notes by an Indian national who was abroad when the 50-day window was in operation, NRIs can deposit only Rs 25,000 as per FEMA law restrictions. However, this facility is not available for Indian citizens residents in Nepal, Bhutan, Pakistan and Bangladesh. The government had declared 500 and 1,000 denomination bank notes as illegal tender from 9 November, 2016. Subsequently, the President approved the promulgation of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 on December 30. It makes holding, transfer and receiving of the demonetised notes a criminal offence, punishable