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Demonetisation: The Easy Way Nri’s Can Exchange Old Notes
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The recent move by the government to demonetize the old notes of Rs. 500 and Rs. 1000 may have affected local individuals. However, this has also affected the NRI’s who have settled abroad and still possess the old notes with them. While residents have the means and resources to deposit the old notes in the bank and get access to the new acceptable notes, the same cannot be said for NRI’s.
NRI’s can run into difficulties if they possess any discontinues currency notes, especially amounting to a high value. Currently, selected NRI banking services in foreign branches of the Indian banks are not accepting the Rs. 500 and Rs. 1000 notes either to be deposited or to be exchanged. This has left individuals with limited options to exchange or deposit old notes and in certain cases, they might have to provide additional disclosures.
However, there are a few ways NRI’s can deposit or exchange these currencies. This canbe done if the individual can travel to India themselves and deposit the funds themselves in any of the local bank accounts. Alternatively, they can also authorise someone in writing to deposit the notes into their NRI account. However, this can be only done if they will be able to send money back home, or if it is already in India. In this case, the authorised individual will need an authorization letter with a valid ID proof, such a passport, PAN card, Aadhaar card or even a driver’s licence.
The rules and deadlines for the exchange are the same for residents as well as NRI’s. There is no limit on the amount that can be deposited. However, if the deposit does exceed Rs 2.5 lakhs, the individual will face an inquiry. The source of the funds will be clarified, irrespective of whether the individual has filed the tax returns in India or even abroad. In the event the individual hasn’t filed the income returns in India, a notice from the income tax authorities will be sent to the respective individual to their file the returns or produce relevant information or records to substantiate the income or deposits made.
There are several NRI banking services that are allowing the deposit of these notes, only in the NRO account. However, the individual would be required to disclose the source of the funds at the branch itself. However, these deposits need to be in line with the profile of the customer. This isbecause the banks had graded customers before the government’s demonetisation drive had started. In the event the NRI has deposited funds in the NRO account, it will be registered as a high-value transaction, wherein which, a copy of the currency exchange receipt would have to be provided. In the event the individual’s response is found to be unsatisfactory, the bank would be required to file a suspicious transaction report within seven days, which will be passedto the financial intelligence unit of India.
Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about NRI banking services. Through her work, she provides valuable information about demonetization and the easy way NRI’s can exchange old notes.
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