Millennium Post

Govt rules out extending Dec 30 deadline for depositing old notes

Government on Tuesday said sufficient cash is available with RBI and banks, and it is not considering extending the deadline of December 30 for deposit of invalid Rs 500 and Rs 1,000 notes.

The statement was made in the Rajya Sabha even as people queued up at banks to deposit old high value notes and withdraw new cash.

“There is sufficient cash available with the Reserve Bank of India and banks. Circulation of notes in respect of Rs 100 has already been increased,” Minister of State for Finance Arjun Ram Meghwal said in a written reply.

On whether the December 30 deadline will be extended, he said, “No such proposal for extension of deadline beyond December 30, 2016, is presently under consideration of the government.”

To cater to the requirements of rural areas, banks have been advised to supply notes of smaller denominations (Rs 100 and less), Meghwal added.

As on November 8, the day demonetisation was announced, there were 1,716.50 crore pieces of Rs 500 and 685.80 crore Rs 1,000 notes in circulation.To another question, Minister of State for Finance Santosh Kumar Gangwar said RBI advises banks from time to time to enhance security arrangements at their branches and ATMs.

This include coverage of ATM sites by CCTVs and ensuring adequate training of security staff posted there.

Banks have also been advised to review and strengthen the security arrangements in their branches/ATMs to deal with instances of robberies and risk perceptions emerging from such incidents.

The Centre’s allowing the use of scrapped 500 and 1000 rupee notes for paying utility bills has seen the revenues for city municipal bodies pole-vaulting as much as 2,500 per cent in cities like Hyderabad in the last three weeks.

The overall revenue collection by cities has shot up to Rs 1,722 crore in November as compared to Rs 489 crore in the same month last year.

According to Finance Ministry estimates, there has been an unprecedented 252 per cent increase in revenue collection by cities for utilities ranging from water and electricity bills to property taxes.

The list of top five cities with maximum percentage increase in revenue collected this month, compared to November 2015, is led by Hyderabad, a 2,500 per cent jump. North Delhi is a close second with 2,434 per cent surge in revenue and South Delhi is at fourth position with 2,037 per cent vault.

Gujarat cities - Surat (2,314 per cent) and Rajkot (1,275 per cent) take the third and fifth spots respectively.

In terms of actual cash flow, Hyderabad tops the list with a record Rs 206 crore collection. Ahmedabad is second with a revenue windfall of Rs 187 crore, followed by Surat with Rs 173 crore and Kalyan (Rs 170 crore). Mumbai saw Rs 167 crore collection in November.

While scrapping high denomination currency on November 8, the government had allowed using the old 500 and 1000 rupee notes for a range of services - from buying fuel to paying for utilities.

Municipal bodies accepted the old currency for settling all past as well as present dues, leading to a flood of revenues.

Use of junked notes was first allowed for 72 hours but was extended till November 14, and then to November 24. Now, it is allowed till December 15.Nearly 20 days after the Centre’s demonetisation move, the queues outside the ATMs have eased but customers have been crowding the banks in large numbers to withdraw and deposit money. 

RBI mulling steps to stop valid notes’ hoarding

Nudging retailers such as malls and shop owners to deposit their daily collections with banks, RBI has said they would be allowed to withdraw the deposited sum in Rs 2,000 and Rs 500 notes, irrespective of the existing withdrawal limits.

The decision is aimed at discouraging hoarding of valid currency notes and increasing its circulation to mitigate cash crunch following the demonetisation of old 500 and 1,000 rupee notes.

In a notification, the Reserve Bank of India said it has been reported that “certain depositors are hesitating” to deposit their monies into bank accounts in view of the current limits on cash withdrawals. 

“As it is impeding active circulation of currency notes, it has been decided, on careful consideration, to allow withdrawals of deposits made in current legal tender notes on or after November 29, 2016 beyond the current limits,” RBI said. It added that preferably, available higher denominations bank notes of Rs 2,000 and Rs 500 are to be issued for such withdrawals. 
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