You can exchange old denominations of Rs 500 and Rs 1000 worth Rs 4000 only once

Wait! If you thought you would exchange any amount of money with old Rs 500 and Rs 1000 denominations from bank, that’s not at all true. As per the Frequently Asked Questions (FAQs) on the RBI website, you can exchange maximum upto Rs 4000 per user. And it’s not Rs 4000 per day, as believed by many.

In the "Withdrawal of Legal Tender Character of existing Rs 500 and Rs 1000 Bank Notes", the RBI website explains the old de-monetised notes can be exchanged at any Issue Office of the Reserve Bank or any branch of public sector banks, private sector banks, foreign banks, Regional Rural Banks, Urban Cooperative Banks and State Cooperative Banks for a period up to and including the 30th December, 2016. However there are a few conditions applied.

The limit of Rs 4000 per person is at one time exchange allowed till this decision is reviewed 15 days from November 8 i.e. on November 22nd. Further, RBI has not issued any clarification to the contrary so far.

However, quite obviously this rule is being currently circumvented by people visiting branches of different banks with the same ID proof or with different ID proofs. It appears unlikely that given the short time at their disposal and the current pressure of work bank officials would be able to cross check with branches of other banks.

The confusion has arisen because of the RBI instructions regarding cash withdrawals from ATMs, which state: Withdrawal from ATMs shall be restricted to Rs 2,000 per day per card up to 18th November, 2016 and the limit shall be raised to Rs 4,000 per day per card from 19th November, 2016.

However, it is to be noted that when a person is withdrawing from the ATM he/she is drawing from his/her own bank account and NOT exchanging notes. Quite obviously, RBI has restricted the exchange of notes to Rs 4000 per person till further review.
Since all the instructions regarding withdrawal from ATM and savings account have been specified for per day, it has been inadvertently assumed that exchange of old notes worth Rs 4,000 limit is also per day.