Old Rs 500/1,000 notes cannot be used for deposits in small saving schemes: FinMin

Zee Media Bureau

New Delhi: Following the demonetisaion move, the Finance Ministry on Tuesday cleared all air about the used of old Rs 500, Rs 1000 notes in saving schemes stating they cannot be used for such deposits.

While demonetised currency notes are valid for medical bills in hospitals, metro and railway bookings and payments at petrol pumps, the government has ruled them out from used as deposits in saving schemes.

Old currency notes of Rs 500 and Rs 1000 will not be allowed to make deposits in small savings schemes, the Finance Ministry said.

Old currency notes of Rs 500 and Rs 1000 will not be allowed to make deposits in small savings schemes: Finance Ministry #DeMonetisation — ANI (@ANI_news) November 22, 2016

Since the demonetisation announcement on November 8, the ministry said it has received references from banks on whether these high denomination currency notes can be deposited in accounts opened under small saving schemes.

"The matter was examined in the ministry and it has been decided that subscribers of small savings schemes may not be allowed to deposit old currency note of Rs 500 and Rs 1,000 in small saving schemes," the ministry said.

Small saving schemes include Post Office deposits public provident fund (PPF) and Sukanya Samriddhi. Interest rate on these schemes range between 7.3-8.5 percent.

While announcing the demonetisation, Prime Minister Narendra Modi had asked holders of such notes to deposit or exchange them in banks till December 30. RBI has also issued new Rs 500 and Rs 2,000 notes.