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PM Modi Scraps Rs 500 And Rs 1,000 Notes; Rs 2,000 Note Will Be Issued
People who possess currency notes of Rs 500 and Rs 1,000 denominations can exchange them in banks and post offices from November 10 to December 30
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The government has observed the growing menace of fake Indian currency notes and black money's use for financing terrorism across the border.
In the past fiscal year 2015-16, the Indian currency notes circulation for the Rs 500 and Rs 1,000 notes had risen to 76 per cent and 109 per cent and therefore scrapping these two high denominations of the Indian currency is definitely one of the best ways to fight back the shadow of ghost economy that was damaging the real economy.
Minister Narendra Modi said, "Starting midnight from Nov 8, these notes will only be the paper they are printed on." The decision has come as a big surprise and public reactions on social media show great support and enthusiasm for the financial surgical strike.
Despite some inconvenience, the decision has been welcomed by the tax payers as this method of demonetization will cut the ties of black money hoarders/non-tax payers and bring down the use of counterfeit of the Indian currency for illegal purposes.
"There will be no change in any other form of monetary exchange -- cheque, DD, payment via credit or debit cards," said RBI governor Urjit Patel.
People who possess currency notes of these denomination can exchange them in banks and head and sub post offices from November 10 to December 30, by providing a valid proof for identity such as Aadhar card, PAN card or voters ID card. Post-December 30, these notes will be accepted only by the Reserve Bank of India after submitting a declaration. It is also been addressed by the PM in his remarks. "From midnight today, till November 10, ATMs will not function. Banks will be closed for public transactions tomorrow."
He added, "For a few days, cash up to Rs 2,000 only can be withdrawn from ATMs. This will be enhanced to Rs 4,000 later on. The withdrawal limit for ATM will eventually be fixed at Rs 10,000 per day and Rs 20,000 per week".
There are some exemptions: Government hospitals, pharmacies at Government hospitals, public sector-run petrol bunks, and burial grounds. Airports will make arrangements to inform international travellers that the cash limit is Rs 5,000.
All other denominations such as Rs 100, Rs 50, Rs 10, Rs 5, Rs 2 and Re 1 note as well as coins will continue in circulation unaffected. Although, the legal status of the tender notes Rs 500 and Rs 1,000 have cancelled with immediate effect, people will have about 50 odd days to get the exchange their total amount from banks.
There also this update that soon the new notes Rs 2,000 and Rs 500 would be released for regular economic transactions, however the note of Rs 1,000 might not be rolled back. In the new specimens the government and the RBI have taken utmost care to avoid any kind of breach on its security.