No Exchange of Old Notes on Saturday, Only Senior Citizens Exempted

New Delhi: Banks will not exchange old Rs 500 and Rs 1000 notes on Saturday, but exemptions will be made for senior citizens.

The Indian Banks Association (IBA) said it decided to stop over-the-counter exchange of old notes for a day so that banks can carry out their other functions. Withdrawals through cheques and other services will be available to all customers during normal banking hours, IBA officials said, adding that the decision was not due to shortage of currency.

This comes amid reports that government is mulling a ban on exchange of old notes before November 25.

CNBC-TV18 quoted unnamed officials as saying that misuse of currency as well as use of multiple IDs by people to exchange notes as the main reason.

Also, the government is likely to clarify penalty provisions for high value cash deposits. The 200 percent tax penalty suggested earlier does not exist under any of the present laws.

Officials said the government could also amend tax laws to include a penalty provision on high cash deposits.