India grants demonetization exemption for prepaid credit
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The Indian government has made a special exception to temporarily allow demonetized 500 rupee notes for the purchase of prepaid top ups in response to a sharp decline in purchases.
The government enacted legislation earlier this month to declare the use of 500 rupee and 1000 rupee banknotes invalid as part of a crackdown on counterfeiting and black market money.
New 500 rupee and 2000 rupee banknotes have been issued to exchange the old currency, but the policy led to a cash shortage in the country.
In response to lobbying from GSM industry body the Cellular Operators’ Association of India (COAI), the government has added prepaid top-ups up to the list of essential services allowed to accept the old banknotes.
Consumers will be able to pay for top-ups up to a maximum of 500 rupees using the old notes until December 15.
The mobile industry had been seeking for the exemption to apply to both prepaid and postpaid services, and for the old 1000 and 500 rupee notes, but the government has approved the exemption only for prepaid purchases and 500 rupee notes, the report adds.
Questions & Answers
Q.What prompted the Indian government to make this exemption for prepaid top-ups?
What prompted the Indian government to make this exemption for prepaid top-ups?
The government made this special exception in response to a sharp decline in purchases of prepaid top-ups. This decline occurred following the demonetization of 500 and 1000 rupee banknotes, which led to a cash shortage.
Q.Until what date can consumers use the old 500 rupee notes for prepaid top-ups?
Until what date can consumers use the old 500 rupee notes for prepaid top-ups?
Consumers will be able to pay for prepaid top-ups using the old 500 rupee notes until December 15. After this date, the exemption allowing their use for these services will no longer apply.
Q.Which specific industry body lobbied the government for this demonetization exemption?
Which specific industry body lobbied the government for this demonetization exemption?
The GSM industry body, the Cellular Operators’ Association of India (COAI), lobbied the government for this exemption. They sought to have prepaid top-ups added to the list of essential services accepting old banknotes.
Q.What was the broader request from the mobile industry regarding this exemption?
What was the broader request from the mobile industry regarding this exemption?
The mobile industry had sought for the exemption to apply to both prepaid and postpaid services, and to include both the old 1000 and 500 rupee notes. However, the government approved it only for prepaid purchases and 500 rupee notes.
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