Old Rs 500, Rs 1,000 notes can be used to pay utility bills, fuel, taxes till November 14

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Earlier, Narendra Modi had announced that old Rs 500 and Rs 1,000 notes would be accepted for basic utilities only till midnight of November 11.

Government extended use of old Rs 500 and Rs 1,000 notes on Friday for paying household utility bills, fuel, taxes and fees as well as purchases from co-operative stores by another 72 hours to November 14 as it struggles to make available alternative currency. While withdrawing Rs 500 and Rs 1,000 notes from the night of November 8-9, the government had allowed 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, purchase of medicines on doctor prescription from the government and private pharmacies, LPG gas cylinders, railway catering, electricity and water bills and ASI monument entry tickets. The time limit set was to expire mid-night on Friday, but it has now been extended by another 72 hours, top government officials said.

 

The government has allowed use of the old currency to make payments at co-operative stores subject to valid identity proofs being provided. Public utility bills include only household bills. Court fee will also be allowed to be paid in old 500 and 1,000 rupee notes.

Old Rs 500, Rs 1000 notes will be accepted for payment of fees, charges, taxes, penalty to central and state governments, including municipalities and local bodies. Such old notes will also be accepted for payment of utility charges like water and electricity. The official said while the old notes were allowed to be accepted for highway toll payment, the Ministry of Road Transport and Highways has freed national highways of any toll charges till November 14.

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Tempers flare as currency chaos grips India for second day 

 

There was no end to chaos for a second straight day across India on Friday as millions thronged banks and ATMs to deposit the spiked currency and withdraw cash, only to face an unprecedented cash shortage.

With tempers flaring at banks and on the streets, two staffers of a private bank branch here were assaulted by angry customers after they were told there was no cash to disburse, witnesses said.

All over the country, residents and correspondents reported serpentine queues outside banks even before they opened for the day. While the scenes were orderly in many places, desperation led to chaos in most others.

Most people complained that they were running out of cash to buy even essentials as they had not done any banking since Tuesday midnight -- when the 500 and 1,000 rupee notes ceased to be legal tender.

"The rush today is more than yesterday (Thursday)," a guard at a State Bank of India branch in Noida, adjoining Delhi, told IANS. It was the same story almost everywhere.

Government ministers again justified Prime Minister Narendra Modi's decision to spike the 500 and 1,000 rupee currency in a bid to check black money and corruption.

BJP President Amit Shah denounced the opposition. "I can't understand the problems of these political parties. Why do they oppose demonetisation?"

On the streets, some frustrated people provided the answer.

"We don't know whether this measure will check black money or not but we have been put into massive inconvenience," complained Manoj Kumar, a Noida shopkeeper, echoing a widely held view.

The widespread complaint was that despite queuing up to surrender or exchange the spiked currency and withdraw cash from their own accounts for hours, many could not even enter the overcrowded banks.

In most cases, the crowds were so thick that they spilled over to the roads, causing traffic problems. Police had a tough time managing traffic and agitated bank customers.

In New Delhi, Congress Vice President Rahul Gandhi surprised everyone by joining a zig-zagging queue outside the SBI on Parliament Street saying he wanted to get Rs 4,000 exchanged for new currency.

"I want to stand in the queue... People are suffering," he said.

Criticism of the government move was rampant, more because of its suddenness and the resultant hardships it had caused to households as well as businesses.

"There is an anarchy like situation in India," Congress leader Anand Sharma said. The AAP urged its activists to help out illiterate people in the queues.

In the first clear sign that the demonetisation was having a political fallout, it emerged that the Prime Minister seemed to have lost over three lakh followers on Twitter.

The Reserve Bank of India (RBI) said there was enough cash with banks across the country to exchange the demonetised Rs 500 and Rs 1,000 notes though it may "take a while for the banks to recalibrate their ATMs".

In Lucknow, people stuck in serpentine queues outside banks and ATM kiosks got rowdy in some places. At others they openly aired their frustration.

Overworked bank staff complained that they were doing their best but people were insisting on taking out more than the permissible 4,000 rupees per day, claiming family emergencies.

The anger mounted when banks ran out of cash even before their stipulated closure time. As for ATMs, tens of thousands did not function in state after state, mainly because they were not configured for the new 2,000 and 500 rupee notes.

A dentist in Kerala said she was accepting cheques from known customers.

Engineering student Ranjan Samal despaired in Bhubaneswar that he had run out of money. SBI customer Sudhakar Rao complained in Hyderabad that he was in the queue for two hours and tired. Chennai resident Syed Ishtiaq Ahmed, a senior citizen, said he had no money to buy milk and vegetables.

"There is a severe shortage of 100 and 50 rupee notes," a Chennai banker admitted to IANS.

The crisis resulted in some tragedies also. A 48-year-old man who had reached the State Bank of Travancore in Kannur in Kerala fell from the third floor of the building and died, said police, while in Mumbai a senior citizen standing in a queue outside a bank to exchange his demonetised notes died of a heart attack.

Apart from this tragedy, there was no end to people's woes in Mumbai as thousands of ATMs did not dispense cash. And those who succeeded in making withdrawals from banks on Thursday encountered problems exchanging them in the markets for smaller denomination notes that seemed to have virtually disappeared.

As much as Rs 53,000 crore was deposited with the SBI in the last two days after the demonetisation, the bank said. The SBI also exchanged currencies valued around Rs 1,500 crore.

However, happy days were reported by the National Payments Corp of India Ltd (NPCI), which recorded a 100 per cent surge or double its normal usage of RuPay cards at points of sales in the past 48 hours.

The government has said that banks across the country will remain open on Saturday and Sunday too. But few expect the problems to wane soon.

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War on black money: Chaos in Bihar as ATMs run out of money

People in large numbers thronged banks to exchange old currency notes of Rs 500 and Rs 1,000 denomination and withdraw money from ATMs, that went dry at several places, across Bihar on the second day of transaction.

In Patna, many stood in long serpentine queues in front of different nationalised and private banks to exchange old currency notes of Rs 1,000 and Rs 500 besides depositing and withdrawing money.

 

Since morning till in the evening long queues were witnessed at almost every bank branch as panic-stricken citizens went to banks on the second day of their reopening after the Prime Minister Narendra Modi announced to demonetise Rs 1,000 and Rs 500 notes to fight menace of black money, corruption and fake currency.

Long queues were witnessed at ATMs too which opened today after the gap of two days. ATMs were closed for two days-Wednesday and Thursday- for their re-calibration to dispense money. Many ATMs ran out of cash in couple of hours as there were heavy rush to withdraw money but a large number of ATMs, especially on Boring road or Boring canal road of the capital, were not working till 11 am since morning.

People were a harried lot as they were finding it difficult to meet their daily needs for paucity of money.

"After completing my morning walk, I went to the ATM of ICICI Bank around 7 am on Boring road roundabout but it was closed. One of the guards told me the ATM was to be replenished with cash in the night but the process could not be completed in the night and hence it was not dispensing money," said Ajay Kumar, a resident of Anandpuri area in the capital. "Things have gone from bad to worse as I am completely run out of money and it is becoming difficult to meet my daily needs," Kumar added. Vivek Kumar Singh, a resident of Rajiv Nagar, said, "I woke up early in the morning in order to avoid rush at ATMs thinking that ATMs would have been replenished in the night.

But to my surprise, no ATM was opened in my vicinity." Bank employees are facing tough time dealing with customers.

"We (employees) could not get time to have our lunch during the day as the branch was flooded with people," S K Shrivastava, Manager, Bank of India, S K Nagar branch told PTI.

The situation was more or less the same at all branches of banks be it nationalised or private banks. SBI, Bank of India, Allahabad Bank, Canara Bank, Punjab National Bank, UCO bank, ICICI, HDFC etc.

There are 6,700 bank branches in Bihar. Out of this 4,300 are in public and private sector while rest are regional rural and cooperative banks.

The state has around 6,600 ATMs and over 4 crore ATM-cum debit cards.

There were reports of shortage of cash in some branches due to huge rush of customers which was solved.

"Yes, we are getting reports of problems like shortage of cash from various branches and work of money exchange is hampered for an hour or so but soon the cash is provided to the banks concerned and work resumed. It is a continuous process. This is happening because of people rushing to the branches in huge numbers," said Praveen Kumar, Assistant General Manager, RBI Patna, who has been made nodal officer for Patna.

Similar scenes of people queueing up at various banks' branches and ATMs have been reported from various districts.

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Rs 500, Rs 1,000 ban: India may soon see cash riots unless govt ensures adequate cash flow

 

Government notables led by Finance Minister Arun Jaitley are arguing that the decision, spearheaded by Prime Minister Narendra Modi, was aimed at making India a cashless society. But unless the government is successful in ensuring adequate cash flow in banks and ATM machines over the next few days, the country will truly become cashless.

For the past three days, conversations in families and offices have often begun and ended with the amount of money in physical wallets, not e-wallets. Unless adequate currency notes are re-introduced and made available to people without having to spend hours standing in serpentine queues, we may soon be witnessing cash riots. Already, reports from different parts of major cities are trickling that police is being called frequently to manage crowds milling inside and outside banks and ensuring that frayed tempers do into spill over into bloody battles.

 

In the past two days, I'm not alone whose inbox has been flooded with offers from banks and other agencies for credit cards and advisories on how to make optimum use of electronic transactions. Since Modi’s announcement that government has demonetised existing Rs 500 and Rs 1,000 notes, several newspapers have published full-page advertisements of companies offering e-wallet facilities. Ola and Uber have also sent emails and placed adverts announcing payments for services can be made now by credit card.

These developments, coupled with statements like Jaitley’s that the “logical step was India has to move towards the cashless society” has made it appear that the demise of currency notes and transactions made by them is imminent. But is this possible in a country where a report, sourced to the banking division of the finance ministry revealed that just an estimated 28-32 percent of Indians have easy access to financial institutions?

Publicists of the government, however, will cite that after the success of Jan Dhan Yojna “every Indian family has bank accounts and today almost everyone who wants, has a bank account unless somebody voluntarily opts out” and this is proof that in less than two and a half years, the government has ensured that systems for transiting to cashless transactions have been put in place. It is pointed out that an advisory has been issued for government departments and other official agencies, both Central and at the State-level, to make payments in a cashless manner.

Credit card data is also cited to argue that Indians are increasingly opting for plastic money. Adherers of this viewpoint cite the fact that by March this year, a total of 24.51 million credit cards and 661.8 million debit cards had been issued. But, given the fact that most credit card holders, use more than one and that even after several years, the majority of users do not use debit cards except to withdraw cash from ATM machines, the use of currency continues to be the preferred route for making purchases and clearing bills.

There is no doubt that one part of India, especially the middle-middle classes and above, is increasingly opting for electronic forms of transaction and using their information and knowledge for their benefit. But this section does not comprise the majority which is still made up of people are either hovering below or around the poverty line and those who are marginally above them. As the controversy over zero-balance JDY has shown, having bank accounts is no guarantee that people are using banks regularly. Banking department figures also demonstrate that location of bank branches are skewed in favour of 60 Tier I and Tier II cities with branches in these two categories accounting for almost one-third of total banks in the country.

If one tallies the total population of these cities, one will realise how lopsided Indian banking system is. Besides, giving greater emphasis to banking in big urban centres, disconcertingly, economically less-developed and areas away from the national mainstream – both in terms of geographical location and national consciousness – are neglected by the banking industry. There are 38 districts in the country – mainly in the northeastern states – where there are less than 10 branches and it would be foolhardy to expect people here to transit from not approaching banks to going cashless.

The majority of Indians are no longer illiterate but that does not mean that the majority is technologically competent to conduct cashless transactions. Often, India’s vast mobile network and the number of mobile phones and connections used by people is cited to argue that people are using smartphones to access information related to their profession – be it weather forecast or commodity prices. Yet, the fact remains that for the majority of Indians, mobile phones, far from holders of e-wallet, remain just a simple device to make and receive calls, listen to some music and, of course, read SMSs sent by Modi ji’s department!

The government is trying to leapfrog India’s transactional practise by several decades. There are cultural reasons for people to stick to physical currency and this is not restricted to any class. The poignant tale about the matriarch of rural household who hid two Rs 500 rupee notes from others in the family by stitching these into the quilt with which she covers herself, is symbolic of the importance of paper currency in the Indian currency.

Bank notes provide security and comfort which the system denies to most. Some weeks ago, there had been an alarm all over the country when news spread that lakhs of debit cards had been compromised. India has several lines that divide the people into several sections. By presenting the ability to make a transition to cashless transactions a virtue, we will create a new group of deprived citizens and India could best avoid another category of have-nots.

India does not require an avatar Marie Antoinette. It is not the time for the government to say that if people have no cash, let them go cashless.