Money

NRIs Here’s how to convert your 500, 1000 Rupee notes!


Update: Finally, there is some clarity on what NRIs can and cannot do with their INR notes in possession. Here are the updates.

  1. Update on Jan 2, 2017 – An India who was out of the country during November – Dec period can deposit old notes to his NRO account via RBI’s assigned centers in Mumbai, Delhi, Chennai, Kolkata and Nagpur till June 30th, 2017. NRI citizens, who were abroad during this period, can exchange their defunct notes up to June 30, 2017. However there is a limit of R.25,000 per person.
  2. If an NRI has INR old 500 and 1000 in possession with him/ her abroad, the only way it can be exchanged with new notes is by either flying down to India or by authorizing a person who might be flying to India soon, to deposit in your NRO account.
  3. You can authorize a person to carry your old 500 and 1000 Rupees by writing a letter of authorization and the person providing a valid ID like Aadhar Card at the bank when in India.
  4. Any amount can be deposited to the NRO account but for amounts above 2.5 Lakh Rupees, sources have to be stated.
  5. Sources should be declared with valid supporting documents like salary slips with data that matches your ID.
  6. Amounts deposited should match with the user’s profile (income to deposit ratio). If not, questions can be asked and details have to provided at the bank.
  7. For huge amounts (suspicious amounts rather), Income Tax department might be involved and you will be required to show proof of income to the IT department.
So, in summary, you can get your old notes exchanged if the amount is under 2.5 Lakhs, with authorization. If under 25K Rupees you have to either go to the bank in India yourself or send it via a friend with proper authorization. In either case, you need to have an NRO account to be able to exchange old notes.

Sources: BS, RBI.


If you are an NRI and have Rupees you carried with you all the way outside India, you have bad news. India Government just cancelled all the 500 and 1000 Rupee notes in circulation as void. Which means, you have almost a month to return all your 500 and 1000 Rupees notes to your nearest bank or post offices. This is an initiative by India Government to curb circulation of black money.

Here’s everything you need to know.

  • All 500 & 1000 rupee notes currently in circulation have to be turned over to the bank before December 30th 2016
  • These places will take your old 500 & 100 Rupee notes.
  • New 2000 and 500 Rupee notes will be brought into circulation “soon” (no dates available yet)
  • On November 9 and in certain places on November 10, 2016 ATMs will not work.
  • Government hospitals will accept old Rs. 500 and 1000 notes till 11 November midnight. (Might need Doctor’s letter in certain cases)
  • Petrol pumps and retail outlets will have to record and monitor every entry of cash transaction in Rs 500 and Rs 1000 notes till November 11.
  • Crematoriums and cemeteries will also be allowed to transact in Rs 500 and Rs 1000 notes till November 11.
  • There will be no change in any other form of currency exchange be it cheque, DD, payment via credit or debit cards etc.
  • Those unable to deposit Rs. 1000, Rs. 500 notes by December 30 for some reason, can change them till March 31, 2017 by furnishing ID proof
  • Notes of Rs. 2000 and Rs. 500 will be circulated soon, RBI has decided to limit the notes with higher value.
  • There are efforts going on from organizations such as GOPIO requesting Govt. of India to help NRIs and PIO exchange their notes at all RBI offices. Source
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Question is, if you are an NRI and had carried some money with you when you flew out of India, what do you do? I had a few 500 Rupees with me and was wondering what do to with it? Will it go invalid if I take them back to India?

Well, the good news is that, NRIs with 500 and 1000 Rupee notes can get them converted to local currency (US Dollars or UAE Dirhams or whatever) at once place – an Airport near you (or a currency exchange center). [Update – This doesn’t seem to be working anymore as they’ve paused transaction in INR until further notice. Check the comments for updated details]

Airports have foreign money exchange stations (currency exchange), which will accept the 500 and 1000 Rupee notes until December 30th 2016. So, if you have any Indian money (Rupees) that you carried with you in change lying around, go to the nearest Airport (or any legal money exchange centers) and get them converted to the local currency before it is too late. [Update – Not working anymore]

One thing to note though. I’m talking about small change money I carried with me to pay for Taxi when I land in India (not stashed money). Because it is illegal to carry huge sums in and out of India anyways (hope you already know it).

How much money in cash, can you carry to India while traveling?

(Indian residents can carry up to Rs. 7,500 Rs. 25,000 in Indian cash when traveling to India. (Source) And you can carry up to USD 5000 in cash or USD 10,000 as traveler’s cheques but should be declared with the customs at Airport). The point is that NRIs aren’t supposed to be carrying huge amounts of INR with them, it is illegal and might fall into the category of black money.

Can NRIs convert Rupees in consulate/embassy abroad?

No. At least not at the moment. According to the RBI, some provisions will be made for NRIs to be able to exchange their old currency notes with new denominations through RBI offices before March 17th 2017. But there is no clarity on whether these offices are going to be in India or abroad.

Also, when you go to the money exchange center, make sure you carry a valid ID. You cannot get foreign money exchange done without a valid ID (passport, Driving licence etc).

Alternate Option 1 – If you want something done quicker, you should try sending whatever money you have back to India via a money transfer service. You will need to get to them physically and hand over the money though. Here  is a list of money transfer services to India, you could make use of.

Alternate Option 2– Alternatively, send all the money you have to someone in India (or your own NRE/NRI/NRO account) using a remittance service from your country. You will have to go to their local outlet to convert the money though.

So, all the best! Let me know how it goes.

Update 1 (Nov 8th, Morning): (Banks and currency exchange centers WILL NOT accept Indian Rupees (unless they have a currency exchange center running along side). I just got it confirmed with State Bank of California and few other banks in USA and UAE.) Some banks which have a currency/foreign exchange running are were accepting Indian Rupees, I’ll update the list here shortly. Do check back later.

Update 2 (Nov 8th, Afternoon): NRIs currently outside India can get their liquid money exchanged by authorising another person in India (relative perhaps) in writing (like power of attorney) to deposit the 500 and 1000 Rs notes into your bank account with the authority letter and identity proof such as Aadhaar card, driving licence, voter ID card, passport, NREGA card, PAN card etc.

Update 3 (Nov 8th, Night): Some NRIs are of the opinion that the best way to convert your money is to send it through someone you know who is traveling to India. While this might be a good idea, it’s not a dependable or scalable one. Some of you might have friends or family going to India, and you can give your money to them and have it deposited at an Indian bank by your friend/relative. But then again, this is not a permanent fix.

Update 4 (Nov 8th, 930 PM, PST): There is some clarity on the issue finally from reliable sources that NRIs who are currently out of India (traveling or working abroad) will get a chance to convert the 500 and 1000 Rupee notes at selected RBI offices before March 2017. Although the list of RBI offices that will accept this is still unclear. Also, this will be considered an extra ordinary circumstance and NRIs will have to provide proof/evidence that you were abroad during this time (from Nov 2016 to whenever you are converting) on work, travel etc.

Update 5 (Nov 9th, Noon): A “band-aid” solution is to send the cash that you have through a relative/friend who is traveling to India before December 30th and have him convert the money at any Indian bank. You can arrange him to pay you back the money when back. But hey, this is a temporary fix and many things can go wrong here. I wouldn’t recommend it, but if there is some kind of emergency and you are desperate to get this done, without having to wait, then go for it. Just make sure you don’t fall in to some kind of trap sending money with an unreliable person.

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Update 6 (Nov 11th, Night): Another proposed possible solution to this issue by a gentleman from Seattle (who wants to remain unnamed) is that the India Govt. temporarily lift the ban on being able to send Rupee notes via post to India from abroad. At the moment, sending currency via regular post to India is illegal. But he says, if Govt. will lift the ban temporarily, say up to December 30th, 2016, then Indians abroad will be able to send their money (under 25K as it is the allowed limit) to India to their relatives and have the notes converted. He mentions that there is also a possibility for people with black money to abuse this system, so there should be some kind of restriction the weight of the mail, which will restrict the amount of notes sent. But this too, I think will be abused by folks with black money, as they might try and send different packages to India. Regardless of that, it is a possible solution, if the ban is lifted or sending currency via post is regulated and made legal. (like sending gifts to India via customs is legal at the moment)

How to exchange Indian Rupee in UAE?

Many of my friends from UAE are asking if situation is any different in gulf countries. Are they able to exchange or convert 500 and 1000 Rupees from Dubai or other Emirates. Well, as of all the details we have now, no. UAE Exchange, one of the leading money transfer agencies in UAE has officially issued a declaration that they are temporarily holding off on accepting any Indian Rupees at their outlets, until further notice. They are citing the reason that Govt. of India hasn’t given any clarity on what to do with the 500 & 1000 Rupees notes they are getting. I contacted few employees there and they mentioned that they are awaiting an official “nod” from India Govt. to start accepting Indian Rupee notes. Once they do, they’ll resume accepting, but as of now, there’s a pause on everything.

The problem with converting Indian Rupee notes via NRO account

Many sources (including Indian banks overseas) are quoting the RBI’s citation about using an NRO account to convert your old 500 and 1000 Indian Rupees. But there is a problem here.

NRO accounts are like regular savings account for NRIs, but in India. For example, if you have a house given out for rent in India, and you are living abroad as an NRI, the tenant can deposit the rent in INR into your NRO account in India, on your behalf (or you can directly when you are in India). If you are an NRI, living abroad and have old 500 and 1000 Rupees lying around in India, you could authorize anyone with a written letter to go deposit that money in the bank (to your NRO account) and have it converted.

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The problem is for NRIs who are carrying liquid cash with them (smaller amounts for cash change, say Rs.25,000 for Taxi or something). Currently, there is no way for them to physically move the money back to their NRO accounts in India, as you cannot deposit money to your NRO account from abroad. You have to physically be available in India to deposit the money in to your NRO account.

I think there was some kind of overlook in this part by the Govt.. International travelers, temporary Indian workers (H1B, L1 etc), NRIs who aren’t planning to go back to India, but holding liquid cash in smaller amounts, are all in the same boat – with no real legal options to convert this money to new denomination. Hopefully, there will be an update soon.

Can you exchange Rupees from Australia, Europe or other countries?

Just like USA, UK or UAE, countries like Australia, Canada are kept in dark as of now. Many people have reported from European countries too that foreign currency exchanges there aren’t accepting Indian Rupees. But they too are hoping that this is a temporary issue and will be cleared soon.

Update Nov 10th – Let’s ask the PM! Please ReTweet

At the moment, there’s no official word but there’s one thing we can do to. Let us tweet to the PM and bring it into his attention that there are many of us NRIs here in the US, Canada, UAE, Australia (well, all over the world) who have liquid cash with them, and don’t know what to do. I’ve taken the first step and has tweeted to the Govt authorities! If you want to support, pease ReTweet my tweet, or tweet on your own. Here it is..

 

 

Related reading

1. How to identify a fake 500 Rupee note.
2. What’s the best way to send money to India from USA and the UK?
3. 10 Best mobile apps for transferring money to India from anywhere abroad.

Disclaimer: Please do not use any of the things mentioned in this article as legal advice or official information. I’m not a legal expert. Everything mentioned in this article is purely for educational purpose and on personal research and could be wrong. Please use your judgement.


Hi, Mani Karthik here. Having lived in USA, India & Middle East, and worked for big MNC’s to startups, I have a lot to share with you. My aim is to help people, by sharing everything I’ve learned in life, through this blog. It’s read today by more than 150K people world over! I currently live in LA, California and visit India occasionally. Here’s my full story on who I am and why I blog. Connect with me on FBInstagram, Twitter or WhatsApp (+001-408-489-4785). Happy to help! 🙂


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