1. Demonetisation: Exchange of old currency notes over the counter stopped

Demonetisation: Exchange of old currency notes over the counter stopped

In a late evening announcement, government extended the use of Rs 500 till Dec 15, but stopped over-the-counter exchange.

By: | New Delhi | Updated: November 24, 2016 10:20 PM
arun jaitley, arun jaitley meeting, demonetisation, demonetisation news, demonetisation india, rs 500, rs 1000, india economy Demonetisation: Payments for the transactions under all the exempted categories will now be accepted only through old Rs. 500 notes (PTI/Reuters)

Much to the disappointment of the general public, Union Minister for Finance Arun Jaitley on Thursday announced that the government has decided not to extend the exemption on use of Rs 500 and Rs 1,000 notes. According to the Narendra Modi government, it has made some changes relating to operational aspects of the scheme relating to cancellation of old Rs 500 and Rs 1000 notes and the most imprtant ones among them are that no over the counter exchange of old notes will be entertained after midnight of 24.11.2016. However, certain other exemptions have been continued and these will apply till 15th December, 2016. Certain additions and modifications may well be made during this period, according to the government.

Here are the salient features of what the government announced today:

i) It has been observed that over the counter exchange of the old currency notes of Rs. 500 and Rs. 1000 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. 1000 notes in their bank accounts. This will encourage people who are still unbanked, to open new bank accounts. Consequently, there will be no over the counter exchange of old Rs. 500 and Rs. 1000 notes after midnight of 24.11.2016.

(ii) Government had also permitted various exemptions for certain transactions and activities wherein payment could be made through old Rs. 500 and Rs. 1000 notes. It has been decided that all these exemptions, with the additions and modifications as detailed below, may be continued for a further period from the midnight of 24.11.2016 up to and inclusive of 15.12.2016 :-

(a) Payments for the transactions under all the exempted categories will now be accepted only through old Rs. 500 notes;

(b) Payment of School fees up to Rs. 2000 per student in Central Government, State Government, Municipality and local body schools;

(c) Payment of fees in Central or State Government colleges;

(d) Payments towards pre paid mobile top-up to a limit of Rs. 500 per top-up;

(e) Purchase from Consumer Cooperative Stores will be limited to Rs. 5000 at a time;

(f) Payment of current and arrear dues to utilities will be limited to only water and electricity. This facility will continue to be available only for individuals and households;

(g) Considering that the Ministry of Road Transport and Highways have continued the toll free arrangement at the toll plazas up to 2.12.2016, it has been decided that toll payment at these toll plazas may be made through old Rs. 500 notes from 3.12.2016 to 15.12.2016.

(h) Foreign citizens will be permitted to exchange foreign currency up to Rs. 5000 per week. Necessary entry to this effect will be made in their passports. (Necessary instructions in this regard will be issued by the RBI.)

The government is facing an increasingly strident Opposition led by the Congress, which demanded that the NDA government revoke the limit imposed on withdrawal of funds by the people from banks. Speaking in Parliament, Congress leader Anand Sharma said Prime Minister Narendra Modi had destroyed the country’s financial system. He said, “The Narendra Modi government has broken
The government is facing an increasingly strident Opposition led by the Congress, which demanded that the NDA government revoke the limit imposed on withdrawal of funds by the people from banks. Speaking in Parliament, Congress leader Anand Sharma said Prime Minister Narendra Modi had destroyed the country’s financial system. He said, “The Narendra Modi government has broken trust of the people and has wrecked the banking system of the nation. Our demand is that the Centre should revoke the withdrawal limit and free the people from inconvenience.” Later, both the Lok Sabha and Rajya Sabha were adjourned for the day over the demonetisation issue despite the presence of Prime Minister Narendra Modi in the pre-lunch session. The post-lunch session was called off as Congress members wanted Prime Minister’s presence throughout the debate, but PM Modi did not entertain their requests.

Earlier, during the debate on demonetisation, former PM Manmohan Singh berated the Narendra Modi government over the ban on Rs 500 and Rs 1000 notes and said that this would cost the country as much as 2% of GDP. He however, said that the Congress stood with the NDA over the fight against black money.

 

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