Govt May Stop Old Note Exchange

The government is considering whether to stop the exchange of old notes for new ones, as per sources on Friday.

Yesterday, the limit on a one-time swap of the old bills for new ones was lowered from Rs. 4,500 to Rs. 2,000.  But, sources said, the government is concerned about the misuse of this offer and feel it is “clogging the banking system.”

A series of reports have shown the same people trading in old Rs. 500 and Rs. 1,000 notes, depriving others of their entitlement.
After the ban on Rs. 500 and Rs. 1,000 notes, the government said that the bills must be deposited in banks by the end of the year.  It announced that individuals could, for now, exchange up to Rs. 4,000 worth of old notes for the new Rs. 500 and Rs. 2,000 notes. That limit was raised to Rs. 4,500 earlier this week and then brought down to Rs. 2,000.

Finance Ministry officials acknowledged that there was clear evidence of people using proxies to collect the new notes, or of those who had already collected their quota or lining up again at banks.

To prevent this, banks were told to use indelible ink to mark those who’d made the swap, a tactic used in elections. But banks have reported a shortage of or no access to the inks and some have been using permanent markers.

Whereas on the other hand, news agency ANI reported that as per official sources, “As of now there is no proposal to stop exchange of old currency notes.”