Residents/ Non-residents abroad can exchange SBNs till 31 March 2017/ 30 June 2017

Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 promulgated by GOI: Residents/ Non-residents abroad can exchange SBNs till 31 March 2017/ 30 June 2017 respectively; penalty for contraventions of provisions of ordinance at minimum of Rs. 10,000 or 500% of face value of SBNs involved

Govt. has notified SBNs (Cessation of Liabilities) Ordinance, 2016 to provide an opportunity to residents/ non-residents who were abroad and could not deposit SBNs before deadline of 30 Dec. 2016. Further, CBEC has prescribed a Declaration form to be filled up by NRIs for depositing Specified Bank Notes (SBNs) on arrival. Now resident Indians who were abroad during 9 Nov. 2016 to 30 Dec. 2016 can exchange the SBNs till 31 March 2017 subject to FEMA Regulations, whereas non-residents can do so latest by 30 June 2017. Afterwards, holding, transferring and receiving SBNs will attract a penalty of Rs.10,000 or 500% of face value of the SBN involved in the contravention, whichever is higher.

GOI Press Release dt. 30 Dec. 2016 SBNs (Cessation of Liabilities) Ordinance, 2016 

The President of India has approved the promulgation of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 today i.e. on 30th December, 2016.

The Ordinance is a follow-up to the decision taken by the Government of India to cancel the legal tender character of the existing series of banknotes, as on November 8, 2016, in the denominations of Rs.500 and Rs.1000 (Specified Bank Notes-SBNs) in circulation.

The main objectives of the Ordinance are (i) to provide clarity and finality to the liability of the Reserve Bank of India and the Government of India for the SBNs; (ii) to provide an opportunity to those persons who were unable to deposit the SBNs within the time provided; and (iii) to declare holding, transferring or receiving SBNs as illegal, with provisions for penalty for contravention of any of the provisions of the Ordinance.

This decision follows a number of steps taken to eliminate the menace of unaccounted money in the economy including setting up of a Special Investigation Team (SIT); enacting a law regarding undisclosed foreign income and assets; amending the Double Taxation Avoidance Agreements between India and Mauritius and India and Cyprus; reaching an understanding with Switzerland for getting information on Bank accounts held by Indians with HSBC; encouraging the use of non-cash and digital payments; amendments to the Benami Transactions Act; and implementation of the Income Declaration Scheme 2016. It is a move in line with the government’s initiatives to curb unaccounted money in the system, money laundering and tax avoidance.

As on 30th December, 2016 a part of the Specified Bank Notes (SBN) have come back to the Reserve Bank of India and these are now a part of the formal financial system, increasing the deposit base of the banks and improving their ability to lend. People have also embraced and are continuing to adopt different digital forms of payments. The ecosystem of digital payments infrastructure is continually being improved and strengthened to make it easier for more people to adapt to this form of payment.

As was notified on 8th November, 2016 those persons who were unable to exchange or deposit the SBNs in their bank accounts on or before 30th December, 2016 shall be given an opportunity to do so. Accordingly, this facility has been granted to all Indian citizens who were outside India from 9th November, 2016 to 30th December, 2016 to tender these SBNs at the specified Issue Offices of RBI until 31st March, 2017. For those citizens of India who are not resident in India, this facility would be available till June 30, 2017 in order to allow them adequate time to plan a visit as per their convenience.

The above facility would be subject to the regulations of the notification “Foreign Exchange Management (Export and Import of Currency) Regulations, 2015. As per these Regulations bringing back such currency into the country is restricted to Rs.25,000/- per person. Separate FEMA provisions are applicable to persons in Nepal and Bhutan which would continue to apply.

At the time of return to India the number and denominations of the SBN will need to be declared to the Customs authorities at the airports and other entry points. Necessary form for such declaration will be given out by the CBEC. The details of the declaration and statements that are required to be submitted along with the SBNs at the time of deposit in RBI Issue Offices will be separately announced by RBI. Any false declaration will invite a fine of Rs. 50,000 or five times the amount of the face value of the SBN tendered, whichever is higher.

After the period of exchange is over, the liabilities of the Reserve Bank and the guarantee of the Central Government towards the Specified Bank Notes will stand extinguished. Further, to prevent any continued parallel transactions with the SBNs by unscrupulous elements, after this period, holding, transferring and receiving SBNs will attract a fine of Rs.10,000 or five times the amount of the face value of the SBN involved in the contravention, whichever is higher.

GOI Notification dt. 30 Dec. 2016 [F. No. 10/03/2016-Cy. I]

S.O. 4251(E).— In exercise of the powers conferred by clause (b) of sub-section (1) of section 2, read with clause (i) of sub-section (1) of section 4, of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 (Ord. 10 of 2016), the Central Government hereby specifies, in respect of a citizen of India, referred to in clause (i) of sub-section (1) of section 4 of the said Ordinance,—

(a) who is a resident in India, the period ending on the 31st day of March, 2017; and

(b) who is not resident in India, the period ending on the 30th day of June, 2017, as the grace period for the purposes of the said Ordinance:

Provided that the amount of specified bank notes tendered does not exceed the amount specified under regulation 3 or regulation 8 of the Foreign Exchange Management (Export and Import of Currency) Regulations, 2015 [Notification No. FEMA 6 (R)/RB-2015, dated the 29th December, 2015] made under the provisions of the Foreign Exchange Management Act, 1999 (42 of 1999) and the conditions specified therein are complied with.

CBEC prescribed Declaration form to be filled up by Residents/ NRIs abroad during 9 Nov. to 30 Dec. 2016 and returning India on or after 31 Dec. 2016 for depositing Specified Bank Notes (SBNs) on arrival

CBEC Circular No. 60/2016-Customs dt. 31 Dec. 2016 F.No.520/09/2016-CusVI

CBEC Prescribed Declaration Form for Residents/ Non Residents depositing SBNs

In terms of Gazette Notification No 2652 dated November 08, 2016 issued by the Government of India, Rs. 500 and Rs. 1000 denominations of Bank Notes of the existing series issued by Reserve Bank of India (hereinafter referred to as Specified Bank Notes (SBNs) ceased to be legal tender with effect from November 09, 2016 to the extent specified in the said notification.

2. Subsequent to this, President of India has approved the promulgation of the Specified Bank Notes (Cessation of Liabilities Ordinance) Ordinance, 2016 (Ord. 10 of 2016) on 30.12.2016. The ordinance imposes penal liabilities on the holders of SBNs after the specified date. The main objectives of the Ordinance are:

a. to provide clarity and finality to the liability of the Reserve Bank of India and the Government of India for the SBNs;

b. to provide an opportunity to those persons who were unable to deposit the SBNs within the time provided.

c. to declare holding, transferring or receiving SBNs as illegal, with provisions for penalty for contravention of any of the provisions of the Ordinance.

3. Pursuant to the Ordinance, the Central Government has specified, in respect of a citizen of India, referred to in clause (i) of sub-section (1) of section 4 of the said Ordinance, the grace period for tendering the SBNs as below-

(a) who is a resident in India, the period ending on the 31st day of March, 2017; and

(b) who is not resident in India, the period ending on the 30th day of June, 2017,

4. The above facility would be subject to the “Foreign Exchange Management (Export and Import of Currency) Regulations, 2015. As per these regulations bringing back such currency into the country is restricted to Rs. 25, 000/- per person. It may be noted that persons returning from Nepal and Bhutan are not permitted to carry SBNs.

5. For the period from up to 31.3.17 or 30.6.17, as applicable, a declaration form will need to be filled by resident Indians and Non-resident Indians coming to India and carrying SBNs for depositing these SBNs in the specified offices of RBI in India. At the airport/ land customs stations etc on entry, Customs stamp on the said forms shall be affixed and the same shall be submitted along with other documents to RBI offices. In this regard, a form, has been devised as annexed to this Circular, which is to be filled by the NRs/ NRIs for the above purpose.

6. Since the form to be filled in by the passenger bearing the Customs stamp would be crucial in subsequently facilitating the deposit of SBNs in the specified issue offices of RBI, the Customs formations may keep a copy of the said form (preferably in a scanned format) for their own record and later reference, if any. The Customs officer shall strictly count the number of notes and tally the total amount mentioned before stamping the form submitted by the passenger.

7. Since it is a facilitation measure to enable resident Indians and non-resident Indians deposit SBNs, when they arrive in India, within the time frame provided above, therefore, measures may be taken to give this Circular adequate publicity by making suitable arrangements with Airport authorities and individual airlines etc. Additional Customs staff may be deputed for this purpose, wherever required. While discharging the above task, care may be taken that due courtesy is extended to the declarants and that no unnecessary inconvenience is caused.

RBI guidelines on Facility for exchange of Specified Bank Notes (SBNs) for Residents/ NRIs during Grace Period (Verification of KYC and Account details)

RBI Circular dt. 31 Dec. 2016 Ref. RBI/2016-17/205 DCM (Plg) No.2170 /10.27.00/2016-17

1. Please refer to the GoI Ordinance No. 10 of 2016 dated December 31, 2016 on “The Specified Bank Notes (Cessation of Liabilities).

2. In terms of Paragraph 4.1 of the above, a facility for exchange of SBNs is made available for the resident and non-resident citizens who could not avail the facility from November 10 to December 30, 2016 on account of their absence from India during the aforementioned period. In particular, the above facility is available only to those tenderers whose accounts are KYC compliant and those who have not deposited SBNs into their accounts from November 10 to December 30, 2016.

3. As the above information is available with the banks, specific offices of RBI will be approaching the banks for: (i) confirming the KYC status and (ii) information on deposits of SBNs, if any, into the accounts of the tenderers. The banks are, therefore, advised to put in place an arrangement to furnish the required information within 07 days from the date of receipt of request. Towards this, the banks may designate an officer in the rank of General Manager as Nodal Officer who may be contacted by our Offices. The name, contact details (including mail id) of the Nodal Officer may be mailed.


Facility for exchange of Specified Bank Notes (SBNs) during Grace Period

1. In terms of Section 4 (1) of the Specified Bank Notes (Cessation of Liabilities) Ordinance, 2016 of the Government of India dated December 30, 2016 and their Notification S.O. 4251(E) dated December 30, 2016 thereunder, the captioned facility has been formulated by the Reserve Bank to afford an opportunity to those Indian citizens who could not avail facilities of exchange of SBNs under the earlier facility, as they were not present in the country during November 9, 2016 to December 30, 2016.

The provisions of the facility are as under:

2. Places of Exchange.

This facility will be made available through five of the offices of the Reserve Bank viz. the Reserve Bank offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur.

3. Eligible persons.

3.1 The facility can be availed only by Indian citizens in their individual capacity and only on one occasion during the period. No third party tender is permissible under the facility.

3.2 Among Indian citizens, two categories of individuals, holding SBNs, can avail of the facility:

i.  Resident Indians who were abroad during the period from November 9 to December 30, 2016, and

ii. Non Resident Indians(NRIs) who were not in India during the period from November 9 to December 30, 2016

3.3 This facility will not be available for Indian citizens resident in Nepal, Bhutan, Pakistan and Bangladesh.

3.4 The terms/ conditions and modalities of the facility for the two eligible categories defined above are as under:

a. Resident Indians

i) Only those residents  who were abroad during the period from November 9, 2016 to December 30, 2016 will be eligible to avail this facility  only once during the tenure of the facility.

ii) There will be no monetary limit for submission of SBNs in the tender.

iii) Tenders should be submitted in a Tender Form as per Annex 1 with necessary documentary evidence to prove they were abroad during the said period.

iv) A copy of Passport with immigration stamp as proof of the individual’s absence from the country during the period November 9, 2016 to December 30, 2016 should be submitted. Passport in original should be presented at the RBI counter for verification.

v) Copies of all bank account statements evidencing that no SBNs were deposited during November 10, 2016 to December 30, 2016.

vi) Tender should be accompanied by Valid ID Proof and Aadhaar number along with applicant’s KYC compliant bank account details.

vii) Requisite document as per provisions of Section 114B of IT Rules, 1962 will be required

viii) An acknowledgment of receipt will be issued to the tenderers pending credit of admissible amount.

ix) On ascertaining that the tenderer was abroad during the period from November 9, 2016 and December 30, 2016, the account is KYC compliant, fulfillment of other conditions and the genuineness of the notes tendered, admissible amount will be credited to the account under advice to the tenderer.

b. Non Resident Indians (NRIs)

i) Only those NRIs who were not present in India during the period from November 9, 2016 to December 30, 2016 will be eligible to avail this facility   once during the tenure of the facility.

ii) Tenders should be submitted along with a Tender Form as per Annex 2.

iii) Tenders will be restricted to a maximum of ₹ 25,000 per individual depending on when the notes were taken out of India as per relevant FEMA rules.

iv) A Copy of Passport with immigration stamp as proof of the individual’s absence from the country during the period November 9, 2016 to December 30, 2016 should be submitted. Passport in original should be presented at the RBI counter for verification.

v) A certificate issued by Indian Customs on arrival through Red Channel after December 30, 2016 indicating the import of SBNs, with details and value thereof should also be submitted.

vi) Copies of statements of all bank accounts in India evidencing that no SBNs were deposited during November 10, 2016 to December 30, 2016.

vii) Requisite document as per provisions of Section 114B of IT Rules, 1962 are required to be submitted.

viii) An acknowledgment of receipt will be issued to the tenderers pending credit of admissible amount.

ix) On ascertaining that the tenderer was abroad during the period from November 9, 2016 and December 30, 2016, the account is KYC compliant, fulfilment of other conditions and the genuineness of the notes tendered, admissible amount will be credited to the account under advice to the tenderer.

4. Duration

The facility will remain open for residents from January 2, 2017 to March 31, 2017 and for NRIs from January 2, 2017 to June 30, 2017.

5. Representation

Any person, aggrieved by the refusal of the Reserve Bank to credit the value of SBNs tendered, may represent to the Central Board of the Reserve Bank within fourteen days of the communication of such refusal to him. Such representations should be addressed to the Central Board, Reserve Bank of India, Secretary’s Department, Central Office Building, 16th Floor, Shahid Bhagat Singh Marg, Mumbai – 400 001.

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