Valid ID proof must to exchange Rs 500, Rs 1,000 notes

People with unaccounted cash in Rs 500 and Rs 1,000 currency notes will find it difficult to exchange them at the banks and post offices even though it is allowed, because they would require a valid identity proof and would be caught on camera. “Valid ID would be required to deposit money in bank accounts.Banks would also have video recording of those making deposits,” department of economic affairs secretary Shaktikanta Das said on Tuesday at a joint press conference with RBI governor Urjit Patel.

There is a limt of Rs 4,000 on conversion of Rs 500 and Rs 1,000 notes till November 24. Das said this measure was needed for integrity of the economy. “For long, shadow of ghost economy has been a problem. If you want the real economy to grow then the shadow economy has to be wiped out,” he said. “This decision of the government is very bold and decisive,” Das said, adding that the measure was necessary both in medium and long-term.

Urjit Patel said the government had observed use of high value currency for terror financing and black money, and multiple objectives were achieved though replacement of high value currency notes. The RBI, he said, would ensure there is no disruption caused by the phasing out of Rs 500 and Rs 1,000 notes and had ramped up our production of lower currency denomination notes to meet the requirement. To allay apprehensions about the issues that the move could lead to, Das said 24-hour control rooms were being set up in the RBI and the finance ministry.

Asked about circulation of images of new Rs 2,000 and Rs 500 notes, which have pictures of Red Fort and Mangalyaan with Mahatma Gandhi in backdrop, he said the decision to come out with a Rs 2,000 note was taken by RBI board three months ago. But this decision was not known to anyone, and the government would look into leak of images of new currency notes on the social media, Das said.

The Economic Times New Delhi,09th November 2016