The government today extended the use of old 500 and 1000-rupee notes for paying household utility bills, fuel, taxes and fees by another 72 hours to November 14. The earlier time limit was set to expire at midnight today. The government has also asked all states to provide security to banks, post offices and ATMs amid a scramble for cash three days after the government’s sudden decision to take Rs. 500 and 1000 notes out of circulation.
In the evening, the government announced that old 500 and 1,000 rupee notes can be used for paying water and electricity bills for three more days. Similarly, the no toll rule for highways has been extended till November 14.
The desperation for new currency notes grew as ATMs failed to work in several cities, from Delhi and Mumbai to Kolkata, Chennai and Bengaluru. ATMs were to start releasing new Rs. 500 and Rs. 2,000 notes from Thursday midnight, with a limit of Rs. 2,000 a card a day. However, many of the machines had either insufficient cash or had not been reconfigured to disburse the new notes. When they finally started functioning, most ATMs ran out of cash early.
The Reserve Bank of India, in a statement, urged people to be “patient” and assured that “There is enough cash available with banks and all arrangements have been made to distribute the currency notes all over the country.” The State Bank of India has said that it could take 10 days for ATM services to settle down to normal. “You have to understand that there are two lakh ATMs (of all banks) in the country but there are only three to four vendors in the country,” the bank’s chairman Arundhati Bhattacharya said.
On Thursday, as banks reopened, people rushed to deposit and swap Rs. 500 and Rs. 1,000 notes. Withdrawals from banks are limited to Rs. 10,000 a day and old notes can be deposited till December. The State Bank has said that around Rs. 53,000 crore has been deposited by people since yesterday.
Deposits above Rs. 2.5 lakh will be taxed and could draw a 200 per cent penalty if found disproportionately higher than the account owner’s income, according to the government.