No special facilities for OCI holders holding banned currency abroad

There are no special provisions for those residing abroad to exchange or deposit discontinued Indian currency. The chances that a provision to allow those holding discontinued Indian currency notes  abroad to redeem their money by either exchange or deposit at an overseas location where they reside is probably not going to happen. I am getting quite a few emails from OCI holders who seem to be disappointed that no special provisions have been announced for OCI holders to exchange their money. The Modi government has in the past been quite NRI friendly since coming to office and there is still a possibility that once the currency situation in India returns to normal, some type of announcement perhaps may be made to help OCI and PIOs abroad who may possess banned currency notes. Only time will tell.

Why is the Government not helping OCI holders who have banned currency notes abroad?

The heading used above is actually from an email I received from an OCI holder. So let’s look into a few facts on Indian currency notes held abroad. Taking Indian currency notes out of India was either not allowed or limited as per India’s Foreign Exchange Management Act (FEMA) regulations. Looking back at the FEMA rules regarding Indian currency notes to be taken in or out of India, in 2004 only Rupees 5000 in Indian currency notes could be taken out of India [only Rs 100 was allowed if going to Nepal or Bhutan]. This provision was for Indian Residents and not for foreigners. Foreigners were not allowed to take out any Indian currency notes when leaving India as it was illegal to do so.

Compulsory to Exchange Indian currency before boarding

flight

An RBI directive notification dated September 16, 2013 made it compulsory for NRIs and Foreigners leaving India to exchange the Indian currency notes in their possession to foreign currency at special exchange kiosks inside airports before boarding their flight. [See RBI Circular]

Taking Indian currency notes out of India rules relaxed

On June 19, 2014 The Reserve Bank of India allowed just about all residents and foreigners [except citizens of Pakistan & Bangladesh] to take out up to Rupees 25,000 in Indian currency notes when leaving India. The same amount could also be brought back in to India by arriving passengers. [See RBI Notification]

How much of the banned Indian currency notes are held

by OCI and NRIs abroad

First lets consider why OCI or NRIs living abroad would take Indian currency abroad. Indian currency cannot be used abroad legally. Even banks abroad don’t accept Indian currency. The only reason I can assume people take Indian currency notes out of India is so that when they returned to India at some point of time they would arrive with some local currency in their pockets to meet immediate expenses like taxi etc. Even If a person took Rs. 5000 then they would at todays exchange rate have about US$75 and in case someone took the maximum allowed amount of Rs. 25000 they would have US$ 375. We can safely assume that not everyone takes the larger amounts of money out of India. Some perhaps only take the few hundred Rupees they may have left over in their wallets! either way we are not talking of a large amount of money. Perhaps the government realizes this and has refrained from announcing any special plans for discontinued currency notes exchange abroad.

Current situation for those holding discontinued currency notes abroad

The government has given those NRIs holding Indian currency notes abroad additional time to legalize their money by depositing it at RBI in India. OCI & PIOs are not part of this extension but as I mentioned above, there is still hope that the government may come up with some sort of help for OCI & PIOs who may possess some banned currency notes abroad. Either way we are not talking of large sums of money and the Governments attention currently is to deal with the situation in India first.
Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
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[updated January 6, 2017]

Who can deposit banned currency notes.

Maximum amount of deposit now allowed by RBI

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Disclaimer: Information provided is for general knowledge only and should not be deemed to be professional advice. For professional advice kindly consult a professional accountant, immigration advisor or the Indian consulate. Rules and regulations do change from time to time. Please note that in case of any variation between what has been stated on this website and the relevant Act, Rules, Regulations, Policy Statements etc. the latter shall prevail. © Copyright 2006 Nriinformation.com
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No special facilities for OCI

holders holding banned

currency abroad

There are no special provisions for those residing abroad to exchange or deposit discontinued Indian currency. The chances that a provision to allow those holding discontinued Indian currency notes  abroad to redeem their money by either exchange or deposit at an overseas location where they reside is probably not going to happen. I am getting quite a few emails from OCI holders who seem to be disappointed that no special provisions have been announced for OCI holders to exchange their money. The Modi government has in the past been quite NRI friendly since coming to office and there is still a possibility that once the currency situation in India returns to normal, some type of announcement perhaps may be made to help OCI and PIOs abroad who may possess banned currency notes. Only time will tell.

Why is the Government not helping

OCI holders who have banned

currency notes abroad?

The heading used above is actually from an email I received from an OCI holder. So let’s look into a few facts on Indian currency notes held abroad. Taking Indian currency notes out of India was either not allowed or limited as per India’s Foreign Exchange Management Act (FEMA) regulations. Looking back at the FEMA rules regarding Indian currency notes to be taken in or out of India, in 2004 only Rupees 5000 in Indian currency notes could be taken out of India [only Rs 100 was allowed if going to Nepal or Bhutan]. This provision was for Indian Residents and not for foreigners. Foreigners were not allowed to take out any Indian currency notes when leaving India as it was illegal to do so.

Compulsory to Exchange Indian

currency before boarding flight

An RBI directive notification dated September 16, 2013 made it compulsory for NRIs and Foreigners leaving India to exchange the Indian currency notes in their possession to foreign currency at special exchange kiosks inside airports before boarding their flight. [See RBI Circular]

Taking Indian

currency notes out

of India rules

relaxed

On June 19, 2014 The Reserve Bank of India allowed just about all residents and foreigners [except citizens of Pakistan & Bangladesh] to take out up to Rupees 25,000 in Indian currency notes when leaving India. The same amount could also be brought back in to India by arriving passengers. [See RBI Notification]

How much of the

banned Indian currency notes are

held by OCI and NRIs abroad

First lets consider why OCI or NRIs living abroad would take Indian currency abroad. Indian currency cannot be used abroad legally. Even banks abroad don’t accept Indian currency. The only reason I can assume people take Indian currency notes out of India is so that when they returned to India at some point of time they would arrive with some local currency in their pockets to meet immediate expenses like taxi etc. Even If a person took Rs. 5000 then they would at todays exchange rate have about US$75 and in case someone took the maximum allowed amount of Rs. 25000 they would have US$ 375. We can safely assume that not everyone takes the larger amounts of money out of India. Some perhaps only take the few hundred Rupees they may have left over in their wallets! either way we are not talking of a large amount of money. Perhaps the government realizes this and has refrained from announcing any special plans for discontinued currency notes exchange abroad.

Current situation for those holding

discontinued currency notes abroad

The government has given those NRIs holding Indian currency notes abroad additional time to legalize their money by depositing it at RBI in India. OCI & PIOs are not part of this extension but as I mentioned above, there is still hope that the government may come up with some sort of help for OCI & PIOs who may possess some banned currency notes abroad. Either way we are not talking of large sums of money and the Governments attention currently is to deal with the situation in India first.
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Who can deposit banned

currency notes.

Maximum amount of deposit

now allowed by RBI

Read now >>
DEMONETIZATION