The Reserve Bank of India on Friday said that exchange of old notes would still be allowed at counters of RBI. In a statement, RBI said, “The Reserve Bank of India advises members of public that exchange of banknotes in Rs 500 and Rs 1000 denominations, whose legal tender status has been withdrawn, will continue to be available at the counters of the Reserve Bank upto the current limits per person as hitherto. (However such exchange facility is no longer available at other banks’ counters).”
Earlier in the morning, PM Narendra Modi said that those accusing government of not being prepared for demonetisation were themselves not ready for the move. PM added “the common citizen of India has become a soldier against corruption and black money,” and stressed on the need for India to move towards a cashless society. Opposition parties led by Congress have stalled parliament, demanding a reply from PM Modi and compensation for the families of dozens of people reported to have died while queuing at banks to swap old money for new.
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. Last night, the government extended till December 15 the facility of using old Rs 500 notes in public utilities and included more services like mobile recharge but stopped the over-the-counter exchange of defunct currencies and use of Rs 1,000 notes.
In the year to March 2017, the cash crunch is expected to pull down economic growth from last year’s 7.6 percent by as much as 4.1 percentage points, brokerage Ambit Capital reckons. Moody’s Investors Service on Thursday warned the persistent cash crunch could worsen asset quality at Indian banks.
(With inputs from Agencies)