Deadline to deposit junked notes ends today

The 50-day deadline to deposit the old Rs 500/1,000 notes in banks comes to an end on Friday but the cash crunch and queues before ATMs are likely to continue for some more time as currency printing presses have failed to meet the huge demand for new bills.

People, however, will still have time to exchange the currency notes at designated RBI counters till March 31 after giving valid reasons for not depositing defunct notes in their accounts by December 30.

The government is also planning to come out with an Ordinance making possession of old Rs 500/1,000 notes beyond a specified limit for numismatic purposes illegal and
punishable.

Prime Minister Narendra Modi in a surprise announcement on November 8 declared the old Rs 500 and 1,000 notes invalid.

The banks started accepting deposits in scrapped notes from November 10. However, a very few ATMs opened on November 11, as most of the machines had to be recalibrated, for people to get cash which was available in Rs 2,000 denomination.

Saddled with cash crunch, banks resorted to rationing of valid currency notes and fixed a withdrawal limit of Rs 24,000 per account in a week.

Although the overall situation at banks has improved, ATMs still have to do some catching up. Many cash vending machines are still out of cash even after 50 days since demonetisation.

The government move was sharply criticised by the Opposition parties led by Congress and TMC.

With every passing day, the number of circulars from the government or the Reserve Bank kept on rising that led to confusion among bankers as well as the public.

Bankers believe that restrictions on withdrawal of cash from banks and ATMs are likely to continue beyond December 30.

After the demonetisation, the government had fixed a limit of Rs 24,000 per week on withdrawal from bank accounts and Rs 2,500 per day from ATMs in view of the currency crunch.

The government and the RBI has not specified when the restrictions will be withdrawn. Finance Secretary Ashok Lavasa had said the withdrawal cap would be reviewed after December 30.

In case of companies found holding more than 10 junked notes, action would be taken against the officials concerned.

Proceedings could be initiated against "any director, manager, secretary, or other officer or employee" of the particular company.

The ordinance also provides safeguard for the government and the central bank from facing any legal proceedings.

"No suit, prosecution or other legal proceeding shall lie against government, RBI or any of their officers for anything or intended to be done in good faith under this ordinance," it noted.

In 1978, a similar Ordinance was issued to end the government's liability after Rs 1,000, Rs 5,000 and Rs 10,000 notes were demonetised by the Morarji Desai-led government.