Economy

Window shut on currency swap; old ₹500 notes can be used till Dec 15

Our Bureau New Delhi | Updated on January 15, 2018 Published on November 24, 2016

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Pre-paid mobile top-ups, school/college fees added to services that can receive old notes

The Finance Ministry on Thursday closed the window for over-the-counter exchange of demonetised currency notes of ₹1,000 and ₹500 denomination, citing a decline in demand.

But it simultaneously extended the exemptions for the use of the old series ₹500 notes till December 15.

Noting that there had been a decline in the exchange of old notes, a Ministry statment said, “It has... been felt that people may be encouraged... to deposit their old ₹500 and ₹1,000 notes in their bank accounts.” This will also encourage people in the rural areas to open bank accounts and deposit the notes.

Under the modified set of exemptions, the Ministry said payments for transactions under all the exempted categories will henceforth be accepted only through old ₹500 notes.

Following the decision to demonetise ₹500 and ₹1,000 notes on November 8, the Finance Ministry had allowed use of the old currency for various purposes such as petrol pumps, government hospitals, purchase at pharmacies based on prescriptions by doctors as well as utility bills. These were to end on Thursday midnight.

The Ministry on Thursday also permitted the payment of fees up to ₹2,000 per student in Central government, State government, municipality and local body schools through the old series notes as well as payment of fees at government colleges.

It has also extended the exemption for payments towards pre-paid mobile top-up up to ₹500.

However, the Ministry has restricted the use of old notes for payment of current dues and arrears to utilities of only water and electricity. Further, the facility would be available only for individuals and households, it said. Similarly, purchase from consumer cooperative stores will be limited to ₹5,000 at a time.

“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 ₹500 notes from December 3-15,” it further said.

As a special dispensation to foreign citizens and tourists in India, the government has also permitted them to exchange foreign currency up to ₹5,000 per week. “Necessary entry to this effect will be made in their passports,” said the Ministry, adding that the RBI will also issue further guidelines.

Published on November 24, 2016
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