India Rupee Ban: Last Day to Deposit Old 500 and 1,000 Rupee Notes

Indians have until the end of December 30 to deposit discontinued 500 and 1,000 rupee notes in bank and post office accounts, or risk their money becoming worthless.

Last month, the Indian government scrapped the 500 and 1000 rupee notes to crack down on undeclared money and fake cash.

The move divided opinion, especially over how the ban was implemented.

Deadlines for spending the notes or swapping them for new currency have already passed.

Some people, including those of Indian origin living abroad, will be able to exchange the notes in branches of the country’s central bank until March 31, 2017 – but the process will be more complicated than going to a regular bank.

Image source Reuters

Parliament is preparing laws that will make it a criminal offence to hold the old notes from April 1, 2017 onwards.

PM Narendra Modi announced that the notes were no longer legal tender on November 8, sparking panic.

Together the 500 and 1,000 rupee notes represented 86% of the currency in circulation and there have been chaotic scenes in India ever since, with people having to spend hours queuing outside banks and cash machines which have been running out of money.

ATM queues and cash withdrawal limits mean getting currency can still be tricky, and there have been several changes of the rules around how much money people can access or deposit.

India’s government hopes the measures will encourage more people to have bank accounts and move towards a society less reliant on cash.

However, there are concerns that many poorer people and those in rural areas have yet to get bank accounts.

Local companies which allow people to make digital payments both online and in stores have reported a surge in transactions as people look for cashless alternatives.

The government says the move has been a success with the banks flush with cash and significant increases in tax collection.

However, critics argue the move has failed to root out corruption and unearth illegal cash, since most of the money in circulation has been put back into the financial system. Instead, they say, the economy, which was growing at a rapid pace, has slowed down significantly.