Demonetisation: Govt extends use of old Rs 500 notes till December 15, stops over-the-counter exchange

Zee Media Bureau

New Delhi: Government has extended the facility of using old Rs 500 notes in public utilities and certain other services like pre-paid mobile top-up till December 15 and stopped the over-the-counter exchange of defunct currencies and use of Rs 1,000 notes.

It has been decided that these exemptions, with the additions and modifications, will be continued for a further period from the midnight of November 24 up to and inclusive of December 15.

From now on payment of fees up to Rs 2,000 per student has been allowed in schools and colleges run by central and states governments, municipalities and local bodies.

Payment towards pre-paid mobile top-up to a limit of Rs 500 per recharge has also been allowed while purchase from consumer cooperative stores will be limited to Rs 5,000 at a time, an official release said.

Current and arrears dues payments will be limited to only water and electricity, a facility that will continue to be available only for individuals and households.

However, the release said payments for the transactions under all the exempted categories will now be accepted only through old Rs 500 notes.

"Considering that the Ministry of Road Transport and Highways have continued the toll free arrangement at the toll plazas up to December 2, it has been decided that toll payment at these toll plazas may be made through old Rs 500 notes from December 3 to December 15," it said.

Foreign citizens will now be permitted to exchange foreign currency up to Rs 5000 per week. Necessary entry to this effect will be made in their passports, it said.

Explaining the reason for discontinuance of exchange of the defunct notes, the release said it has been observed that over-the-counter exchange of the old notes has shown a declining trend.

It has further been felt that people may be encouraged and facilitated to deposit their old Rs 500 and Rs 1000 notes in their bank accounts. This will encourage people who are still unbanked, to open new bank accounts, it said.

Consequently, it said, there will be no over-the-counter exchange of old notes after midnight tonight.

The exemptions were initially announced by Prime Minister Narendra Modi when he disclosed the demonetisation scheme on November 8. Subsequently there have been modifications in these measures.

The release said the government has been reviewing the issues arising out of the cancellation of the legal tender character of the high denomination notes.

The Government has also been receiving various suggestions in this regard. After due consideration of all relevant aspects, decisions relating to certain operational aspects of the Scheme have now been taken, it said.

There has been large scale criticism of the government in the wake of severe hardships faced by a cross-section of people following demonetisation of high denomination currency. 

Meanwhile, the Reserve Bank in a notification said that over the counter exchange facility for invalid Rs 500 and Rs 1000 will no longer be available from tomorrow.

"On a review it has since been decided that no over the counter exchange (in cash) of SBNs (Rs 500 and Rs 1000) will be permitted after midnight of November 24, 2016," it said.

Banks have been asked to encourage public who approach them for over the counter exchange of such currency to deposit the notes into their bank accounts.

Further, "banks may ensure to facilitate opening of new accounts for unbanked people" the central bank added.

(With PTI inputs)