Indian rupee bank
A queue outside a Kotak Bank branch in Gurgaon.IBTimes

All banks will strictly serve only their own customers on Saturday, the Indian Banks' Association said on Friday. No bank will exchange the abolished notes of Rs 500 and Rs 1,000 from customers of other banks.

"All these days our own customers have suffered because we have not been able to do their work. So we have seen lot of pending work at branches especially for our existing customers. We, from IBA, have taken a view that tomorrow, that is, on Saturday we shall be exclusively doing work for our own customers. And tomorrow we will not be doing exchange of notes (for outside customers)," IBA chairman Rajeev Rishi told reporters.

The chairman, however, said that senior citizens are exempt from this and they can get their old notes exchanged at any bank branch on Saturday.

This decision of IBA only applies for Saturday. Banks will remain closed on Sundays. However, all customers will be allowed to exchange the old notes at other bank branches from Monday onwards. The IBA chairman said that the decision of using indelible ink has had a positive effect on the queues. He said after the banks started using the ink, queues outside the branches have significantly decreased.

"For the last one week, we have been seeing huge rush but for the last two-three days after we introduced the inking of finger we have seen a visible reduction in the rush at branches. The queues have shortened," Rishi said.

The IBA chief also said that banks will use Saturday to finish their pending work since there is "visibly less rush" then.

Meanwhile, Prime Minister Narendra Modi has instructed his party MPs to talk to the general public and the media, and explain to them the positive impact of the decision and also address their concerns. He has also asked them to assist people standing outside banks, ATMs and post offices.

Modi government's sudden decision to scrap Rs 500 and Rs 1,000 notes to curb the spread of black money in the nation has seen people frantically queueing up outside banks and ATMs to collect cash. 

The Supreme Court on Friday said that the situation in the country is grave, since the public is inconvenienced and could spark riots.