Indian nationals have until close of business on Friday to deposit discontinued currency notes at bank and post office accounts marking the end of a grace period for those still in possession of the notes.
Long queues were expected on Friday as the currency notes would no longer be accepted by any financial institution going forward, after the government's move to scrap the 500 and 1000 rupee note in November.
The Indian government's decision was touted as an attempt to end corruption and undeclared money, but the move has divided public opinion, especially over its implementation.
The ban on 500 and 1000 rupee note made rendered 86 percent of the currency void. It pushed millions of Indians, who ordinarily operate in a cash economy, to the periphery . Indians were given until December 30 to swap their old 500 rupee ($7.30) and 1,000-rupee bills for new ones.
India's Prime Minister Narendra Modi was widely hailed for his assault on tax evasion but long queues outside banks, a cash crunch and policy flip-flops quickly led to anger in some quarters.
Modi, who came to power in 2014 pledging to tackle so-called "black" money, was forced onto the defensive as frustration grew at the slow introduction of new notes.
There has been anger in rural areas where farmers have been unable to sell crops while small traders have reported a huge drop in earnings owing to a lack of paper currency in the system.
While many local businesses have heeded Modi's call to move towards a digital economy some industries have ground to a halt and laid off staff, highlighting just how dependent India currently is on cash.
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| The demonetisation policy has proved costly for millions of Indians operating in the country's informal economy [EPA] |
Indians have until March 31 to deposit old notes directly with the Reserve Bank of India but Friday is the last opportunity they have to do so at their local branch.
After the March deadline there will be a minimum 10,000 rupees ($146.5) penalty for holding old notes, the Press Trust of India reported.
Many Indians insisted they didn't mind the hours queueing if it forced the rich to pay taxes. Others said the government lost some goodwill by flip-flopping on deposit guidelines during the window.
Modi will seek to regain some of that goodwill when he makes a New Year's Eve address to the nation on Saturday.
In an interview with India Today news channel aired on Thursday Modi said he'd taken the "tough decision" in the long-term interests of the economy and that if he was "guided by short-term electoral politics" he wouldn't have.
"If the enemy runs, we will chase them. If they change their tactics, we will change ours. When the corrupt find new methods of cheating, we will identify new methods to clamp down..." he warned.
Modi had said his government would end the chaos and restore normality in 50 days.
But analysts said the impact would last at least six more months, with concerns about lower economic growth, job losses and a fall in demand for goods.
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