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5 Reasons why Govt Scrapped Over-the-counter Exchange of Old Notes

People stand in a long queue to withdraw money at an ATM (PTI Photo)

People stand in a long queue to withdraw money at an ATM (PTI Photo)

This would prod more and more unbanked to open bank accounts and this be a part of the formal economy, one of the many original aims of demonetization.

1. There were reports that “cash mules” were lining up on behalf of others to exchange old notes at banks and post offices

2. This was a reason the government asked banks to use indelible ink to ensure no same person gets to avail the facility twice

3. The government felt if this facility where anyone can exchange old notes (after furnishing an valid photo ID) was stopped, the only option left now for those stuck with old notes would be to deposit them in their bank accounts

4. This would prod more and more unbanked to open bank accounts and thus be a part of the formal economy, one of the many original aims of demonetisation.

5. The government reasons people would not be inconvenienced by this abrupt halt (the original deadline was December 30) because the queues for over-the-counter exchange were declining

first published:November 24, 2016, 20:25 IST