New Delhi: The government late on Tuesday allowed banks and post offices to exchange old, big bank notes, which are no longer in circulation, with the Reserve Bank of India (RBI) in a month, provided these notes were collected by December 30, 2016, a Finance Ministry statement said.
Cooperative banks have also been allowed to exchange old currency notes with the RBI, if they had collected these notes by November 14, the statement said.
In an official notification, the Finance Ministry said, "Specified bank notes may be deposited by such Bank, Post Office or District Central Cooperative Bank, as the case may be, in any office of the Reserve Bank, within a period of 30 days from the commencement of these rules, and get the exchange value thereof by credit to the account of such Bank, Post Office or District Central Cooperative Bank, as the case may be, subject to the satisfaction of the Reserve Bank of the conditions specified in the said notification and the reasons for non-deposit of the specified bank notes within the period under that notification."
The relaxation comes against the backdrop of reports that many district co-operative banks did not have enough cash to disburse to farmers, particularly in Maharashtra. The reason, the banks say, is that nearly six months after demonetisation, they still have crores of cash in old currency, which the Reserve Bank of India (RBI) is refusing to accept.
Nashik's District Central Cooperative Bank (DCCB) told NDTV they still have a stockpile of Rs. 340 crore in old 500 and 1,000 notes. Unless this money is converted to new, payments will be hard to make, said Narendra Darade, chairman of DCCB.
Prime Minister Narendra Modi announced a shock move on November 8 last year to ditch Rs. 500 and Rs. 1,000 bank notes - worth a combined $256 billion - that he said were fuelling corruption, being forged and even paying for attacks by militants who target India.