Banks not to swap old currency

Mangalore Today News Network

New Delhi, Nov 25, 2016, DHNS: Banks will not exchange old Rs 500 and Rs 1,000 notes anymore, the government said on Thursday night.

It also said old notes of Rs 1,000 denomination will not be valid for any payment.
The move is expected to tighten cash curbs and promote the use of digital mode of payment.

However, old Rs 500 notes can be used for payment at certain public utilities till December 15. For the convenience of the people, the government has brought more services which can be paid for with old Rs 500 notes.

These include school fees of up to Rs 2,000 per student in all government schools and those run by local bodies.

Now, there are a total of 23 places where old Rs 500 notes can be used.

The government took the decision after the finance ministry reviewed the progress of demonetisation with banks through video conferencing.

“It has been observed that over-the-counter exchange of the old currency notes of
Rs 500 and Rs 1,000 denomination 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 1,000 notes in their bank accounts. This will encourage people who are still un-banked to open new accounts,” the finance ministry said in a statement.

The government has also decided to collect toll at all toll plazas with old Rs 500 notes from December 3 to 15, it said. The Road and Transport Ministry had already made a toll-free arrangement till December 2.

The exempted list includes payment of fees in Central or state government colleges and payment towards prepaid mobile top-up up to a limit of Rs 500 per top-up.
 
Purchase from consumer cooperative stores will be now be limited to Rs 5,000 at a time, the statement said. Foreign citizens will be permitted to exchange foreign currency up to Rs 5,000 per week. Necessary entry to this effect will be made in their passports, the statement added.

Now, citizens can only pay their current or previous water and electricity dues using old Rs 500 notes. Earlier, the government had allowed payment of all dues to the Central and state governments using the old currency.