page_title: Reserve Bank of India
section_title: 2016 demonetisation
hierarchical_section_title: Reserve Bank of India / 2016 demonetisation
caption_attribution_description: English: People gathered at ATM of Axis Bank in Mehsana, Gujarat to withdraw cash following deposit of demonetised currency notes in bank.
context_page_description: The Reserve Bank of India is India's central bank, which controls the issue and supply of the Indian rupee. RBI is the regulator of the entire Banking in India. RBI plays an important part in the Development Strategy of the Government of India.
  RBI regulates commercial banks and non-banking finance companies working in India. It serves as the leader of the banking system and the money market. It regulates money supply and credit in the country. The RBI carries out India's monetary policy and exercises supervision and control over banks and non-banking finance companies in India. RBI was set up in 1935 under the Reserve Bank of India Act,1934.
  Until the Monetary Policy Committee was established in 2016, it also controlled monetary policy in India. It commenced its operations on 1 April 1935 in accordance with the Reserve Bank of India Act, 1934. The original share capital was divided into shares of 100 each fully paid. Following India's independence on 15 August 1947, the RBI was nationalised on 1 January 1949.
  It is a member bank of the Asian Clearing Union.
context_section_description: On 8 November 2016, the Government of India announced the demonetisation of all ₹ 500 and ₹ 1,000 banknotes of the Mahatma Gandhi Series on the recommendation of the Reserve Bank of India (RBI). The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism.
  The Reserve Bank of India laid down a detailed procedure for the exchange of the demonetised banknotes with new ₹ 500 and ₹ 2,000 banknotes of the Mahatma Gandhi New Series and ₹ 100 banknotes of the preceding Mahatma Gandhi Series. The key points were:
  Citizens had until 30 December 2016 to tender their old banknotes at any office of the RBI or any bank branch and credit the value into their respective bank accounts.
  Cash withdrawals from bank accounts were restricted to ₹10,000 (US$140) per day and ₹20,000 (US$280) per week per account from 10 to 13 November 2016. This limit was increased to ₹24,000 (US$340) per week from 14 November.
  For immediate cash needs, the old banknotes could be exchanged for the new ₹500 and ₹2,000 banknotes as well as ₹100 banknotes over the counter of bank branches by filling up a requisition form along with a valid ID proof. It was announced that this facility would be available until 30 December 2016.
  Initially, the limit was fixed at ₹4,000 (US$56) per person from 8 to 13 November 2016.
  This limit was increased to ₹4,500 (US$63) per person from 14 to 17 November 2016.
  The limit was reduced to ₹2,000 (US$28) per person from 18 November 2016.
  All exchange of banknotes was abruptly stopped from 25 November 2016.
  Initially, all ATMs were dispensing banknotes of only ₹ 50 and ₹100 denominations and cash withdrawals from ATMs were restricted to ₹2,000 (US$28) per day. From 14 November onwards, ATMs were recalibrated to dispense new ₹500 and ₹2,000 notes and to allow a maximum withdrawal of ₹2,500 (US$35) per day, while other ATMs dispensing banknotes of only ₹50 and ₹100 denominations will allow a maximum withdrawal of ₹2,000 (US$28) per day.
  However, exceptions were given to petrol, CNG and gas stations, government hospitals, railway and airline booking counters, state-government recognised dairies and ration stores, and crematoriums to accept the old ₹500 and ₹1,000 banknotes until 11 November 2016, which was later extended to 14 November 2016 and once again to 24 November 2016. International airports were also instructed to facilitate an exchange of notes amounting to a total value of ₹5,000 (US$70) for foreign tourists and outbound passengers.
  Under the revised guidelines issued on 17 November 2016, families were allowed to withdraw ₹250,000 (US$3,500) for wedding expenses from one account provided it was KYC compliant. The rules were also changed for farmers who are permitted to withdraw ₹25,000 (US$350) per week from their accounts against crop loan.
caption: People gathered at ATM of Axis Bank in Mehsana, Gujarat to withdraw cash following deposit of demonetised currency notes in bank on 15 November 2016.
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