NEW DELHI: The deadline to submit old 500- and 1,000-rupee notes, declared abolished on November 8, ended on Friday. Starting January 1, you can pull out Rs. 4,500 per day per card- the limit currently is Rs. 2,500. However, the weekly limit per bank account remains unchanged at Rs. 24,000 as the government tries to replace the outlawed currency with new bills. Prime Minister Narendra Modi will address the country today evening to discuss the impact of his abrupt demonetisation drive. The RBI has asked banks to submit details of the deposits made in the outlawed currency. It is estimated that more than 90% of the cancelled notes have been already deposited in banks, which means that the government’s intention of removing black money may have missed its mark.
On November 8, PM Modi’s shock announcement rendered 86 percent of India’s currency void, giving people until today to swap their old 500 rupee and 1,000-rupee bills for new ones. The PM has been widely hailed for his assault on tax evasion but long queues outside banks, a cash crunch and policy flip-flops have led to a concerted attack from the opposition. Many top industrialists and financial experts have praised the PM’s call to move towards a digital economy, but some industries have ground to a halt and laid off staff, highlighting India’s huge dependence on cash. The serpentine queues outside banks have thinned down but a single 2,000 rupee note is still all that most ATMs dispense to customers. The RBI, while easing the restrictions on ATM withdrawals, has asked banks to ensure that the new 500-rupee notes are dispensed from cash machines. So far, these notes have been in very short supply. Only 35-40 percent of ATM machines are currently dispensing cash, according to Ramaswamy Venkatachalam, managing director, India and South Asia, Fidelity Information Services, a banking technology provider.
Until March 31, old notes can be deposited with the Reserve Bank of India but today was the last opportunity to do so at other banks. After the March deadline there will be a minimum 10,000 rupees penalty for holding old notes. Economists expect the economy to benefit in the long term due to an increase in tax revenues but only once there is a plentiful supply of those elusive new notes in circulation. Many Indians have said they didn’t mind the hours of queuing if it forced the rich to pay taxes.