The Union Government has decided to do away with Rs. 500 and Rs. 1000 currency notes from midnight on Tuesday. These notes will cease to be legal tender from the midnight of November 8, 2016, announced Prime Minister Narendra Modi in his address to the nation on Tuesday. “These notes will only be papers from tomorrow,” he said in Hindi, adding that the move is to curb circulation of counterfeit notes and fight blackmoney.
People who posess 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.
However, he said that all notes in lower denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid.
“You have 50 days (From 10 Nov to 30 Dec) to deposit notes of Rs 500 and Rs 1000 in any Bank or Post office,” PM Modi told the nation in a televised address to the nation.
He also announced that new notes of Rs 2000 and Rs 500 will be introduced.
ATM withdrawals will be restricted to Rs 2000 per day and withdrawals from bank accounts will be limited to Rs 10,000 a day and Rs 20,000 a week.
Banks will remain closed tomorrow and ATMs will also not function tomorrow and day after, Modi said.
He expressed confidence that the staff of banks and post offices will rise to the occasion to introduce the new order within the available time.
Modi said corruption and black money needed to be uprooted, adding corruption was eating the country like termite as it had become an integral part of political and administrative lives. The PM said ‘black money’ was used indiscriminately during elections. Assembly elections are due by February in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Of these, Punjab and Manipur are border states. Counterfeit currency is known to be pushed into India from the Punjab border and also via Nepal.
The PM said the Reserve Bank of India had suggested introducing Rs. 5,000 and Rs. 10,000denomination currency notes some two years ago, a proposal that was rejected. But new notes of the Rs. 2,000 denomination and the redesigned Rs. 500 notes would soon be introduced. He said old Rs. 500 and Rs. 1,000 notes would be accepted at railway booking counters, airports, chemists, hospitals and filling stations until the midnight of November 11.