Demonetisation noose tightens: No more exchange of Rs 500 and Rs 1000 notes; Read guidelines!

Los angeles : Indian government on Wednesday tightened the currency denomination noose by announcing that it would no longer allow over-the-counter exchange of old Rs 500 and Rs 1000 notes from Saturday.

The government also announced that the only way to use the old Rs 1000 notes+ would be to deposit them in a bank account.

The statement read: "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."

The move was announced a day after the Reserve Bank of India issued a circular to all banking institutions asking them to take steps to ensure their staff members do not subvert the rules by facilitating exchange of currency notes illegally.

However, some exemptions that are in place for the use or exchange of the old currency notes would be extended till December 15, but the exemptions would only apply for the use of the old Rs 500 notes.

This automatically means that only Rs 1000 notes will now be accepted only for deposits into bank accounts.

Other implementations:

• You will continue to pay utility bills and arrears but they have to be limited to water and electricity, and that too only for individuals and households.
• If you are a foreign citizen you are permitted to exchange foreign currency upto Rs 5000 per week, however all these entries will be recorded in their passports.
• You can continue using the old Rs 500 notes as payment for school fees of up to Rs 2000 in government-run schools and colleges.
• Mobile phone top-ups up to Rs 500 and purchases from Consumer Cooperative Stores up to Rs 5000 at a time.
• Old currency notes will also be accepted for payments at toll plazas from December 3 to 15. The toll suspensions continuing till December 2.