Demonetisation: No old notes of Rs 500 for fuel, air tickets from Saturday

The government is learnt to have decided against accepting old notes of Rs 500 at fuel stations, on suspicion of petrol pumps becoming conduits for converting black money into white.

By: ENS Economic Bureau | New Delhi | Updated: December 2, 2016 12:50 pm
demonetisation, demonetisation news, cash crisis, cash crunch, rbi-demonetisation, petrol pump, old 500 note, old 500 note in petrol pump, old 500 for flight tickets, 500 note ban, 1000 note ban, india news, indian express On November 8, Prime Minister Narendra Modi announced plans to abolish old notes of Rs 500 and Rs 1,000.

A week after permitting usage of old Rs 500 notes at fuel stations till December 15, the government cut short the exemption till the midnight of December 2. Old notes of Rs 500 cannot be used for buying petrol, diesel, gas at stations and airline tickets at airport counters from December 3 onward, the finance ministry said in a statement on Thursday. It can be used for purchase of LPG till December 15.

The government is learnt to have decided against accepting old notes of Rs 500 at fuel stations, on suspicion of petrol pumps becoming conduits for converting black money into white. Since petrol pumps receive large quantity of valid lower denomination notes, these pumps were exchanging old notes with Rs 100 or lesser denomination notes for a commission ranging between 10-20 per cent, industry sources said. The new currency used by customers at petrol pumps could have also been used to exchange old notes, instead of being deposited in the banks.

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On November 8, Prime Minister Narendra Modi announced plans to abolish old notes of Rs 500 and Rs 1,000. But the government had allowed their use for utility bill payments for 72 hours. This deadline was extended thrice with the last one expiring on December 15.

While usage of old Rs 500 note were allowed for exempted category payments till December 15, transactions through old Rs 1,000 notes were stopped since midnight of November 24. The old Rs 500 note will continue to be accepted for payment of water, electricity bills, school and college fee and purchase of railway tickets at counters.

“The processes of production and distribution of currency notes have been continuing and more cash is flowing into the system steadily. The digital transactions have also made an impressive progress and are expected to significantly improve in the coming days. Now, therefore, as digital transaction options have been increasing across different sections of the economy, it has been observed that the outlets of the oil and gas marketing companies are better equipped to accept payments through digital means,” the finance ministry said in its statement.

The facility of exchange of old notes was stopped at bank counters on November 24. But Centre extended deadlines allowing people to make payments in old Rs 500 notes at toll plazas, hospitals, petrol pumps and for paying utility bills till December 15.