How NRIs can exchange 500 or 1,000 Rupee Notes
Updated Jan 18, 2017:
Government of India announced on November 8, 2016 that, starting midnight, ₹500 and ₹1,000 currency notes would be discontinued. Such move was done apparently to reduce black money (unaccounted or non-taxed money or "Number 2" money) circulating in the Indian economy, to reduce counterfeit currency and to help prevent funding the terrorist activities in India. Government of India essentially gave two options: Deposit into the local bank until December 30, 2016 or deposit in RBI (Reserved Bank of India) until March 31, 2017.

Problems for NRIs
While the initially announced approaches would work for most people living in India that have legitimate, small amounts of cash, it creates problems for NRIs (Non Resident Indians) as well PIO (Persons of Indian Origin) who keep small amounts of cash in Indian Rupees for traveling to/from India to cover immediate expenses upon landing in India.

Of course, due to the comparatively lower value of Indian currency, as well as the convenience of carrying and storing it, most people would carry cash in ₹500 and ₹1,000 denominations. There are millions of NRIs living in the US and all over the world. They are wondering how to get their Old High Denomination (OHD) notes exchanged or converted.

Anyone traveling to India can carry up to ₹25,000 per person in cash without any Customs Declaration, as per the latest RBI circular published on February 4, 2016. More information about How much cash can we carry to/from India? However, with filling Indian Customs Declaration Form, you can carry any higher amount but more than Rs. 25,000 can NOT be carried in demonetized notes.

The following are the limited options (or lack thereof) for NRIs to get the Indian currency cash exchanged:

1. You traveling soon to India: Carry cash with you.
This is the only option.

This option is available to NRIs (Non Resident Indians). As per RBI FAQ updated on Jan 17, 2017, it is NOT available to OCIs/PIOs (Foreign citizens of Indian origin).

RBI announced on Dec. 31, 2016 that Indian residents and NRIs who were abroad (except for those returning from Nepal, Bhutan, Pakistan, Bangladesh) from November 9 to December 30 can deposit old Specified Bank Notes (SBNs). Facility is available till June 30, 2017 for Indian residents while it is available till June 30, 2017 for NRIs. You can carry up to Rs. 25,000 in old notes to be deposited at RBI offices.
  • Customs Declaration Form
    When you arrive at the airport, you will have to go through Red Channel and complete a one-page declaration form. Customs official will stamp the document indicating the import of SBNs, their count and value.

    A false declaration or hiding the demonetize currency while traveling to India can lead to a fine of Rs. 50,000 or 5 times the amount being imported, whichever is higher.

  • Required Documents
    In order to exchange old notes at RBI, you would need to submit the following documents:
    • Stamped customs declaration form regarding import of SBNs with the details of count and value.
    • A copy of the passport with immigration stamp as proof that the person was absent from India from November 9, 2016 through December 30, 2016.
    • Original passport for verification by RBI person
    • Any other ID document such as Aadhaar Card, PAN card etc.
    • Copy of statements of all bank accounts in India proving that no SBNs were deposited into them from November 9, 2016 through December 30, 2016.
    • Declaration that the person has not availed the exchange facility earlier.

  • No exchange, only deposit
    After fulfilling the above conditions and after the RBI verifying that the notes are genuine, the amount will be credited to your KYC (Know Your Customer) compliant bank account. That means, you still need to have NRO account in India.

  • RBI Locations
    Such facility will be available only at the RBI locations in Mumbai, Delhi, Chennai, Kolkata and Nagpur.

2. Someone traveling to India soon: Send cash with them.
This is not an option any longer as 'third-party tender' is not accepted.

3. Use local money-exchange facility in your country
Unfortunately, this is not an option. Since the announcement, no money exchange facilities are accepting ₹500 or ₹1,000 Indian currency notes.

4. Your own local bank
Unfortunately, depositing Indian currency into your own local bank (Chase, Bank of America, Wells Fargo etc.) is not an option as they don't accept foreign currency. Even if some of their branches deal with foreign currency, they too have stopped accepting ₹500 or ₹1,000 notes.

4. US branch of Indian bank
Unfortunately, US branches of Indian banks such as State Bank of India in New York or ICICI Bank in Chicago etc. are not allowed to accept money in Indian currency. They have all confirmed that old notes can be exchanged or deposited in their Indian branches only and not in their foreign branches.

5. Sending cash by courier or post
Unfortunately, sending cash by courier or post is not allowed as foreign couriers, post offices as well the Indian post office ban sending currency notes through such medium. Some people may argue that as those currency notes have been discontinued, they are not really currency notes but simply pieces of paper. However, they are still not allowed to be sent in that manner. Government of India has not announced any rule allowing this practice and it is very unlikely that they will allow it. Otherwise, so much money, including counterfeit currency, will enter India defeating the purpose.

6. Currency exchange at an Indian airport
Unfortunately, this is no longer an option as it was allowed only for 72 hours after the announcement and this deadline is over. The limit was up to ₹5,000 per person.

As you can see from above, the only option for NRIs living abroad to get their old notes exchanged is to in India.

While exchanging or depositing the notes, you will have to fill RBI Form.

The following tips will help in various scenarios:
  • NRO Account: If you don't have NRO account, you will need to open NRO account first.
  • NRE Account: You can not deposit Indian Rupees into NRE account, even if you had earlier withdrawn them from your NRE account during your previous visit to India.
  • Overdraft account: If you have taken an overdraft facility against your NRO/NRE accounts or FCNR FDs, you can't deposit the cash into your overdraft account.
  • Cash withdrawal from branches: You can withdraw up to ₹10,000 per account per day subject to a maximum of ₹24,000 per account in a week at any of the bank branches. This includes withdrawals at ATMs also.
  • Cash withdrawal from ATM: ATMs will dispense up to ₹2,500 per day per card. The ATM cash withdrawal limit per card per day will be increased to ₹4,000 from 19th November onwards.
  • NRO FD: You can't open NRO Fixed Deposit (FD) directly using cash. You will have to first deposit the cash into your NRO account. After that, you can use that money to open NRO FD.