The indian prime minister Narenrendra Modi in a televised address to the nation said that high denomination notes of Rs 500 and Rs 1000 will no longer be legal.
FACTS:
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A “decisive” war against corruption to unearth unaccounted money as well as counterfeit currency.
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As of midnight on Tuesday (local time), the country’s two largest banknotes, were no longer considered legal tender
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New banknotes of Rs 500 and Rs 2,000 would be introduced from November 10
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Replacement currency to be in market in 3-4 weeks.
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Cash withdrawal restrictions will be eased once the supply of new currency notes improves and a stockpile of lower denomination notes is created.
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The government anticipates that a lot of money lying unused will come into the formal economy that can be used for economic development of the country.
OLD BANK NOTES:
Old notes can be deposited in banks and post offices from Nov. 10 to Dec. 30
People will be able to exchange their old notes for new ones at banks over the next 50 days but they will no longer be legal tender.
NHAI instructed all toll plazas to accept old Rs 500, Rs 1,000 notes till Nov 11 midnight.
Till November 11, the following government-authorised places and institutions will continue to accept Rs 500 and Rs 1000 notes for payment: Hospitals, Railway, airline, bus ticket booking counters, Petrol, diesel and gas stations authorised by public sector oil companies, Consumer co-operative stores, Milk booths, Crematoriums and burial grounds
This step by Modi is an attempt to fulfill his election promise of curbing tax evasion and recovering illegal income, locally known as black money, stashed overseas.
A one-time chance to come clean on unaccounted wealth led to declarations of only about 25 billion rupees in tax last year, while an income declaration scheme this year had met with a mixed response.
