After March 31, holding demonetised notes would be illegal and could invite hefty fines, according to an ordinance passed by the Union Cabinet on Wednesday.
Prime Minister Narendra Modi is expected to address the nation on Saturday after his self-imposed deadline of 50-days for the situation to return to normal ends.
While some people are hoping for an extension in the deadline, the government maintained it had no plans to do so.
Modi had on November 8 announced that Rs 500 and Rs 1,000 rupee notes would no longer be legal tender.
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He said the money that was with terrorists, Maoists, and human traffickers “has been neutralised” and that black money has all been forced out into the open.
“The revenue collected will be used for the welfare of the poor, downtrodden and the marginalised,” the prime minister added.