Banks on Saturday will not exchange the old 500 or 1,000 rupee notes for new bills, allowing only senior citizens to make the one-time swap for upto Rs. 2,000.
On Sunday, banks will remain shut.“Across the country, there is visibly less rush,” said Rajiv Rishi, the head of the Indian Bank Association, adding that on Saturday will be used to clear pending work.
Since Prime Minister Narendra Modi’s sudden announcement last week outlawing high-denomination notes, banks have been overflowing with customers desperate to get cash. The bills that were cancelled form 86 per cent of the money in circulation.
The government on Friday denied that it is considering whether to end the offer of providing new notes for old ones. The cap was originally set at Rs. 4,000 and then, this week, raised to Rs. 4,500 only to be reduced on Thursday to Rs. 2,000. Banks have been asked to use indelible ink, just like in elections, to ensure people are not exchanging more cash than is permitted.
PM Modi’s “demonetization” drive aims at curbing tax evasion, corruption and forgery. He has asked people to bear with temporary inconvenience. “Just give me 50 days,” he said in an emotional speech last weekend as he pledged to stop the corrupt from “looting what belongs to the poor.”
The government has emphasized that the move had to be abrupt to ensure those hoarding black money did not have time to channel it into assets like property. And though the reform has been generally praised by experts, the government appears to have incorrectly gauged the extent to which people would be left cashless, particularly in rural India.