BUSINESS

Banks To Stay Open This Weekend To Replace Banned ₹500, 1000 Notes

Banks will open on Thursday as RBI has sent truckloads of new notes throughout the country.

10/11/2016 8:22 AM IST | Updated 10/11/2016 8:34 AM IST
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NEW DELHI -- Having swept away 86% of total currency by banning ₹500 and 1000 notes, the government on Wednesday sought to assuage any panic in public, saying banks and post offices will start giving out replacement currencies from Thursday even as it expanded scope of exempt public utilities.

It also ordered banks to remain open for full day this Saturday and Sunday to deal with rush of people wanting to deposit the defunct currency bills.

Besides, it expanded the list of areas where the withdrawn notes will be accepted till 11 November midnight. They include payments for metro rail tickets, highway and road toll, purchase of medicines on doctor prescription from government and private pharmacies, LPG gas cylinders, railway catering and ASI monuments entry tickets.

A 72-hour relaxation for use of such notes was given on Tuesday for government hospitals, railway ticketing, public transport, airline ticketing counters at airports; milk booths, crematoria/burial grounds and petrol pumps.

Banks and ATMs were shut on Wednesday to remove old ₹500 and 1000 notes and stock them with lower denomination and new hard-to- fake ₹500 and ₹2,000 currency notes. Banks will open on Thursday as RBI has sent truckloads of new notes throughout the country, while some ATMs will begin dispensing cash.

"Through RBI's currency chest, adequate currency is (being) provided in all banks and post offices. But it would require 2-3 weeks for full adequate replacement. It would begin tomorrow morning," Finance Minister Arun Jaitley told reporters.

Withdrawal limitations - ₹2,000 a day from ATM per card and ₹10,000 through bank account on a day and ₹20,000 in a week, will continue for sometime, he said. "As and when more currency comes into banking system, there will be a rethink on those limitations."

Officials said that while honest tax payers as well as housewives and farmers with genuine savings have nothing to worry if they deposit old currencies in their bank accounts and take out replacement ones, tax authorities would keep a close watch on deposits of higher denominations made from illicit sources, black money or crime money.

Housewives, farmers and those whose annual income is within the tax exemption limit may not be hounded by tax authorities for depositing up to ₹2.5 lakh for now- defunct higher denomination currency notes in bank accounts.

"It should be clear that it is no immunity scheme. This (deposit) does not provide any relief from taxation. The law of land will apply (on source of fund)," he said. "If the money is legitimate which had been previously withdrawn from bank or earned legally and saved and had been disclosed, there is nothing to worry about".

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