Exchange of currency stopped; Rs 1,000 no more to be accepted

However, deposit of old currency into bank accounts will continue.

Published: 24th November 2016 08:32 PM  |   Last Updated: 24th November 2016 08:32 PM   |  A+A-

Petrol

A sign at a petrol pump asks customers to provide the exact change for the fuel in Hyderabad | R Satish babu

By Online Desk

In another jolt to the public after demonetisation was announced, the government has decided to stop the over-the-counter exchange of old Rs 500 and Rs 1000 notes. This decision comes to effect immediately. Deposit of old currency into bank accounts will continue.

There is no clarity on what happens to the millions of people who do not possess bank accounts.  The government’s reasoning is that the exchange of notes over the counter has shown a declining trend, and that those who do not have bank accounts will now be encouraged to open one.

As for the exemptions that the government had made on accepting the old currency, after midnight today only Rs 500 denomination notes will be accepted for such goods and services. The Rs 1,000 denomination note will not be accepted henceforth. These exemptions too will only be applicable till December 15,2016.

Keeping in mind the number of tourists in the country at any given time, the government has decided to permit foreign citizens to exchange old Indian currency for foreign currency up to Rs 5,000 a week.  Entries to this effect will be made in their passports.  (Necessary instructions in this regard will be issued by the RBI.)

Here is a list of payments that can be made using only Rs 500 notes till December 15.

1)School fees up to Rs. 2000 per student in central government, state government, municipality and local body schools

2)Fees of Central or State Government colleges

3)Pre-paid mobile top-up  of up to Rs 500 per top-up

4)Purchases at consumer cooperative stores  up to Rs 5,000 at a time

5)Water and electricity bill payment can be paid by individuals and households (not organisations). Both current bills and arrears can be paid.

6)Toll payments can be made from December 3 to December 15 (Road transport ministry has exempted toll payment till December 2)

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