The Indian government has demonetized high value currency notes, as part of its efforts to fight against corruption, black money, and counterfeit notes.
The government said that INR500 and INR1000 notes will no longer be legal tender from midnight of 8 November 2016.
The announcement has been made by the country’s Prime Minister Narendra Modi during a televised address to the nation.
However, the denominations which are not affected by the decision include notes of one hundred, fifty, twenty, ten, five, two and one rupee.
Modi said that “those five hundred and one thousand rupee notes hoarded by anti-national and anti-social elements will become worthless pieces of paper.”
He also announced a series of steps that will help overcome the potential problems arising out the demonetization move.
The government has allowed persons owning old notes of INR500 and INR1000 to deposit them in a bank or post offices from 10 November onwards till 30 December.
The Reserve Bank of India (RBI) said that the scrapped notes of value up to INR4,000 per person can be exchanged for cash over the counter of bank branches.
The central bank will issue new INR500 and INR2,000 notes starting from 10 November.
The government has also placed some restrictions on the withdrawals from ATMs and bank for the very short run.
RBI said that the cash drawals from ATMs will be restricted to INR2,000 per day per card up to November 18, 2016 and the limits will be raised to INR4,000 per day per card from November 19, 2016.
He emphasized that there will no restriction on any kind of non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.
Image: RBI Headquarters in Mumbai. Photo courtesy of KuwarOnline/Wikipedia.