Editorial: 6 reasons why RBI’s extended deadline will not help most NRIs


After several weeks of confusion and thousands of distress calls from Non-resident Indians (NRIs), Reserve Bank of India on Saturday announced that NRIs can exchange old Rs 500 and Rs 1000 notes till June 30, 2017.

The announcement came as a relief to many NRIs who possess demonetised currencies of Rs 500 and Rs 1000 with them. However detailed explanation of the RBI requirements reveal that the extension will not be helpful to majority of NRIs abroad.

Here are the reasons:

1. Facility only in 5 RBI offices

Unlike what many social media messages claim, the exchange facility for NRIs is not available in regular banks and all RBI offices. If you approach your regular bank with demonetised currencies, you will be disappointed.

  • The extended exchange facility for NRIs will be available ONLY through Reserve Bank offices at Mumbai, New Delhi, Chennai, Kolkata, and Nagpur.

It has to be noted that Reserve Bank of India has offices at 31 locations all over India (see the map below), but only 5 regional offices have been selected to open this window.

RBI Office

RBI Office Locations in India (Image: RBI website)

Obviously it will not be feasible for people from distant places or other states to visit these cities, just to exchange Rs 25,000 or less.

While states like Kerala, which has millions of NRIs living abroad, has two RBI offices, none of them provide this exchange facility.

As a matter of fact, someone who lives in Trivandrum (which already has an RBI office) will need to travel at least 1500km (return travel to nearest RBI office in Chennai) and spend thousands of Rupees to exchange his own money.

2. Only notes brought from abroad can be deposited

If you are carrying demonetised currency to India, a declaration form with the number of notes and total amount has to be filled and submitted to Customs Official at airport. The official will issue a certificate or stamp on the declaration form and the same has to be submitted along with other documents to RBI offices.

While the intention here is to control unaccounted money, sadly many NRIs would lose value for the money they had kept in lockers & vaults in India – even if it is accounted and earned through proper channels.

3. Only Rs 25,000 allowed for NRIs

The RBI circular says that there will be no monetary limit for exchange for eligible Indian citizens who were abroad for short period.

However, deposits from NRIs will be subject to the relevant Foreign Exchange laws, which limits it to Rs 25,000 only.

So if you have more than Rs 25,000 with you, the maximum you can deposit is Rs 25,000 and the rest become valueless – even if the source is legal.

Third party tender is not allowed, which means you cannot authorize someone to exchange. In case a husband and wife carries Rs 50,000 to India, both of them will have to travel all the way to RBI office and stand in queue to exchange the currency.

4. Too many documents required

Here are the documents required for exchange of currency at RBI office (as stated in RBI website)

  1. 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.
  2. Passport in original should be presented at the RBI counter for verification.
  3. A certificate issued by Indian Customs on arrival through Red Channel indicating the import of SBNs, with details and value thereof.
  4. Copies of statements of all bank accounts in India evidencing that no SBNs were deposited during November 10, 2016 to December 30, 2016.
  5. Requisite document as per provisions of Section 114B of IT Rules, 1962.

While requirements 1, 2 & 3 are reasonable, we do not understand the logic behind “statements of all bank accounts in India evidencing that no SBNs were deposited during the period”.

With document 1, the person is already proving that he was out of country for last 7 weeks. Only NRO accounts were allowed to accept deposits of SBN and that too with authorization letter. So why statement from all bank accounts?

By showing the Customs certificate, you are already proving that the money was brought from abroad.

  • If an NRI already had some money in India and he deposited it to NRO account (by authorizing someone else) why is he being prohibited from depositing more money he had abroad?
  • While no such restrictions applied for resident Indians, how does RBI assume that NRIs will not have more than Rs 25,000 (white money) with them?

5. Why PAN card if the amount goes to KYC-compliant account?

Even though PAN card and Aadhaar Card are recently being promoted as mandatory requirements for many transactions, the big question is how many NRIs have got them.

According to RBI circular, requisite document as per provisions of Section 114B of IT Rules, 1962 are required to be submitted.  Section 114B of Income Tax Rules is about PAN card as a requirement for depositing Rs 50,000 to bank accounts.

If the limit allowed to NRIs is only Rs 25,000 and the amount is being directly deposited only to KYC-compliant bank accounts, that too upon showing an original Passport, why the requirement for PAN Card?

6. Is six months enough for everyone?

The RBI has extended the deadline to 30 June, 2017 which is a good move. But is it good enough for all?

Considering that average return-ticket rates from most countries is more than Rs 25,000, no one will travel to India to get Rs 25,000 exchanged. The only option is to exchange during holiday visit.

Most NRIs, especially families, visit India during July-September as it coincides with school vacation and festival season. Even in 2017, the school vacations in GCC is expected to start around last week of June. And then there are many more, especially in US, UK etc, who don’t visit every year.

So with the deadline being 30 June, how many people would be able to make use of this facility?

Can’t we do it in a better way?

We understand that some suggestions like exchanging currency a Indian Missions abroad or allowing foreign banks to exchange are not feasible. However, being the apex financial body in India, RBI should have come up with a more practical and simpler facility for NRIs who contribute billions of dollars to Indian economy every year.

It would have helped millions of people if regular banks were allowed to collect demonetised currencies through NRO accounts – of course after producing the necessary documents.

With dynamic leaders like Sushma Swaraj heading Ministry of External Affairs, NRIs are still optimistic that the regulations will be reframed and their currency woes will be answered.


- Published on 4 January 2017


  1. I am in Dual and having Rs5000. How to change it. I have no idea when I will return to home due to financial problems. I have only NRI account. What to do?

  2. with Indian passport, you have to declare the money at custom then clain at RBI.
    If OCI holder then no chance you can’t even declare it.

  3. All NRIs who have few thousand currency in form of banned notes are royally f*cked by Mr Modi. I live in US for more than 15 years. Got 10 thousand rupees from last year India trip. Does not make sense to buy 70000 rupees ticket to go to India for this amount. I went to my bank SBI in California and asked if I can deposit rupees in my NRO acct. They said NO before 30 Dec 2016. They said NO again on 10th Feb 2017. I visit Indian counsulate in San Francisco. Again NO. They ca not help. So Mr. Modi, Jetley, you have screwed us nicely for NO REASON. What is your problem with NRI, Mr. Modi? Allowing extended date unti 31 March 2017 to exchange old notes in ONLY RBI SELECTED BRANCH is of no use to us. You should ALLOW BRANCHES of Indian banks like SBI etc. IN US to exchange or deposit these notes. Otherwise this goto RBI in India for less than Rs. 25000 is same as saying F*CK YOU NRIs from Mr Modi.

  4. The irony is that all these years we were called NRI. Then we got transfered to having a PIO Card, then now OCI card.
    I am a singapore citizen, born in India. So I am a PIO but certainly not a OCI.
    Mess Mess and more Mess.
    Pls inform Modiji not to go overseas and meet Indian there and ask them to invest, if we are deprived of depositing our white cash.

  5. Yes I completely agree with you..
    Modi should not go overseas and meet Indians there… because he and his RBI friends doesn’t consider OCI as citizens of India…
    If he has deprived us of our own money why he expect Indian to create crowd for him and welcome him overseas and invest money

  6. Many NRI are stranded with their old rupees from their last trip to India..I am one of them too with 21000 rupees, its from 8 years ago from my pilgrimage trip..Dear Mr.Modi are you expecting the poor NRIs to make a trip spending another 1-2 laks to change these notes..You think this is fair to us.Hope you take this seriously & introduce NRIs to exchange their balance notes in their own country at their embassy itself. This would ease millions of NRIs disappointments & frustration.

  7. RAM C
    We are NRI’s with US Passport and OCI’s, visiting India with some old (expense money) of 500 and 1000 SBN’s and asked the customs at the airport if we need to have a notification or declaration stamped on the Passport that we have some old currency? The uniformed ‘dude’ standing authoritatively stated “if you have US Passport, u need do nothing, and go to RBI”.
    Going to RBI the guards at the gate seem to have information to turn you away and say “NRI’s with US passport have no rights to exchange old currency notes”.

    Mr. Modi, et al, you may have done a lot of good to wash out corruption and graft from ‘old-India’, so we salute you. But some of us, with some hard earned exchange of Indian currency are equally decimated! We lost faith in holding any semblance of old Indian Legacy currency, never knowing when you will make it worthless.
    Here you are Mr Modi, entreating and waving to NRI’s in US and claiming “you are the cream of crop of India, and India will always welcome you with open arms”.

    Sadly, we found all ‘closed arms’ and so be it for our future investments. So long, my friend, so long mother India!

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