Economy

Government Extends Use of Rs 500, Rs 1000 Notes for Key Utility Payments Until November 24

The latest decision comes after the finance ministry announced on Sunday changes to the previously set limits on exchanging the demonetised currency, and on withdrawals from banks and ATMs.

Credit: Shome Basu

Credit: Shome Basu

New Delhi: With banks struggling to cope with the rush to access alternative currency, the government has extended the use of the defunct Rs 500 and Rs 1000 notes for paying household utility bills, fuel, taxes and fees, and for purchases from co-operative stores until November 24. The decision came following a late night meeting of senior ministers of the Modi-led government.

While withdrawing the Rs 500 and Rs 1000 notes from the midnight November 8, the government had allowed the use of the old currency at government hospitals, railway ticketing, public transport, airline ticketing at airports, milk booths, crematoria/burial grounds and petrol pumps for 72 hours.

This list was later expanded to include payments for metro rail tickets, highway and road toll, the purchase of medicines on a prescription from government and private pharmacies, LPG gas cylinders, railway catering, electricity and water bills and entry tickets to ASI monuments.

As banks have struggled to give out alternate currency, the deadline was extended by another 72 hours, which was to end at midnight tonight, but has now been extended till November 24, official sources said.

The demonetised currency can also be used for purchases at consumer co-operative stores like Kendriya Bhandar with valid ID proof and for paying court fees. Utility bill payments will be restricted to only individuals or households for arrears and/or current bills. No advance payments will be allowed.

The latest decision comes after the finance ministry announced on Sunday evening that the limit to exchange the demonetised currency for the Rs 2000 and Rs 500 notes was increased from Rs 4000 to Rs 4500 per day. Cash withdrawal limit at ATMs was also raised to Rs 2,500 from Rs 2,000 a day. The weekly withdrawal limit of Rs 20,000 from bank counters was also increased to Rs 24,000 and the maximum limit of Rs 10,000 per day on such withdrawals has also been done away with.

(With PTI inputs)