Government extends Rs 500 use till December 15, stops over-the-counter exchange

New Delhi: The government on Thursday extended the last date for use of the denotified Rs 500 notes till December 15, and stopped the over-the-counter exchange of cash with immediate effect.

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

"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," the Ministry said in a statement.

"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," it added.

Originally, the government had permitted the exchange of denotified Rs 500 and Rs 1,000 notes up to a limit of Rs 4,000, which was increased to Rs 4,500 five days later, only to be slashed to Rs 2,000 on November 17. According to the RBI, the scheme to exchange notes was valid till December 30.

The government had earlier 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.

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.

Following is a list of areas added or modified where the concession to use the denotified Rs 500 notes will be applicable from Thursday midnight:

- Payments towards pre-paid mobile to a limit of Rs 500 per top-up

- Purchase from consumer cooperative stores limited to Rs 5,000 at a time

- Payment of current and arrear dues to utilities limited to only water and electricity. This facility will continue to be available only for individuals and households

- The toll free arrangement at the toll plazas extended up to December 2. But after that payments can made through old Rs 500 notes till December 15

- Foreigners will be permitted to exchange foreign currency up to Rs 5,000 per week. Necessary entry to this effect will be made in their passports.

Following is a list of dozen-odd areas where the concession to use Rs 500 notes for emergency cash needs has been extended till December 15:

- For payments in government hospitals for medical treatment

- For use in all pharmacies for buying medicines with doctor's prescription

- At railway ticketing counters, bus ticket counters of government or public sector undertakings and airline counters at airports for purchase of tickets

- For purchases at government-run milk booths

- For purchase of petrol, diesel and gas at stations of state-run oil companies

- For payments at crematoria and burial grounds

- For use at international airports for arriving and departing passengers up to Rs 5,000

- For purchase of LPG gas cylinders

- For payments towards on-board catering during travel by rail

- For purchase of tickets for suburban and metro rail travel

- For purchase of entry tickets monument maintained by the Archaeological Survey of India

- For payments towards fees, charges, taxes or penalties, payable to central or state governments including municipal and local bodies

- For payments towards court fees

- For payments towards purchase of seeds from designated state-run outlets, but only Rs 500 notes