Govt stops counter exchange of demonetized notes, extends Rs 500 use till Dec 15th

Photo of banned Indian currency notes of Rs 500 and Rs 1,000.

New Delhi: The government of India today extended the last date for use of the denotified Rs 500 notes till December 15th and snatched counter exchange of cash with immediate effect.

According to the Ministry of Finance, Rs 1,000 notes now will no longer be allowed to be used for the list of exemptions the government had announced. However, these notes can be deposited in bank accounts.

The Ministry said in a statement, “It has been observed that over-the-counter exchange of the old currency notes of Rs 500 and Rs 1,000 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 1,000 notes in their bank accounts.”

It further added, “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 1,000 notes after midnight of November 24.”

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Earlier, the government had permitted various exemptions for certain transactions and activities wherein payment could be made through the old Rs 500 and Rs 1,000 notes.

“It has been decided that all these exemptions, with the additions and modifications, may be continued for a further period up to December 15,” it said.

The government demonetised Rs 1,000 and Rs 500 notes on November 8 but provided a number of exemptions where they could be used till November 24.

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The statement on Thursday also expanded the exemptions to include payment of fees up to Rs 2,000 per student in central and state government colleges as well as central government, state government, municipality and local body schools.

Pre-paid mobile top-up to a limit of Rs 500 per top has been allowed with the old Rs 500 notes.

On other hand, the foreign citizens will be permitted to exchange foreign currency up to Rs 5,000 per week with necessary entries made in their passports.

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