Exchange of old notes ends, Rs.500 note still in use

The Dollar Business Bureau

Over-the-counter exchange of old Rs.500 and Rs.1000 banknotes has been stopped from today. However, the use of Rs.500 note has been extended for some specific purposes till December 15.

After reviewing the situation post-demonetisation, the government said on Thursday that over-the-counter exchange of old Rs.500 and Rs.1,000 banknotes have shown a decreasing trend.

“It has further been felt that people may be encouraged and facilitated to deposit their old notes in their bank accounts. This will encourage people who are still unbanked to open bank accounts,” it said.

Earlier, the government had allowed exemptions for certain transactions and activities, such as buying railway tickets and cooking gas cylinders, payments at petrol pumps, government hospitals, pharmacies, and toll plazas, where payment could be made via old high denomination notes up to November 24.

Now, it has been decided to extend the use of only Rs.500 note for these transactions up to December 15. The use of Rs.1,000 rupee note will not be permitted.

After due consideration, the government has taken the following decisions:

• Old Rs.500 notes will be accepted for payments for the transactions under the exempted categories.
• Old Rs 500 notes can be used to pay fees of central, state government, municipality or local body schools, up to Rs. 2000 per student.
• Old notes can also be used for pre-paid mobile topup to a limit of Rs.500.
• Payment through old notes for current and arrear dues to utilities will now be limited to water and electricity, only for individuals and households.
• Exemption of toll at the National Highways toll plazas to continue up to December 2. Toll payment at the toll plazas may be made through old Rs.500 notes from December 3-15.
• Foreign citizens will be allowed to exchange foreign currency up to Rs.5000 a week.
• The current withdrawal limit of upto Rs.24,000 a week per bank account continues to be unchanged.
• Withdrawal limit from ATMs is upto Rs.2,500 a day per card.
• The RBI has doubled the limit on digital transactions via e-wallets such as Paytm to Rs.20,000 a month.

From November 25 onwards, old notes cannot be exchanged over the counter and can only be deposited in banks till December 30.