In a bid to fight back counterfeit currency, black money and terrorism, the Government of India in a historic announcement on Tuesday scrapped Rs 500 and Rs 1,000 currency notes from 8th November midnight.
The decision was taken after considering the recommendations of the Reserve Bank of India (RBI). The central bank recommended issuing of Rs 2,000 notes and new notes of Rs 500.
The currency notes of Rs 100, 50, 20, 10, 5, 2 and one will remain legal tender and will remain unaffected by the decision.
Prime Minister Narendra Modi made the important announcement during a televised address to the nation on Tuesday evening. He said the decision will “fully protect the interests of honest and hard-working citizens of India” and that those Rs 500 and Rs 100 currency notes hoarded by anti-national and anti-social elements will become worthless pieces of paper.
The Prime Minister said the steps taken by the government would strengthen the hands of common citizens in the fight against corruption, black money and counterfeit notes.
The Prime Minister has also announced a series of steps to address the difficulties common citizens may face in the coming days.
Persons holding old notes of Rs 500 or Rs 100 can deposit them in bank or post offices from 10th November to 30th December, the Prime Minister announced.
Cash withdrawals from ATMs and banks have also been placed under certain limits for some time.
Prime Minister Modi stated that on humanitarian grounds notes of Rs 500 and Rs 100 will be accepted at government hospitals, pharmacies in government hospitals (with prescription of a doctor), booking counters for railway tickets, government buses, airline ticket counters, petrol, diesel and gas stations of PSU oil companies, consumer cooperative stores authorised by the state or central government, milk booths authorized by state government and crematoria, burial grounds.
As per the announcement there is no restriction on any kind of non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.