In a surprise announcement on Tuesday, Prime Minister Narendra Modi said Rs 500 and Rs 1000 currency notes would be scrapped starting midnight.
Such notes will need to be deposited with banks or post offices before December 30, 2016. Those who miss the deadline can deposit such notes along with a declaration at designated offices of the Reserve Bank of India by March 31, 2017. Such notes can only be deposited against production of government issued identity cards, such as PAN cards, passports, Aadhaar cards, and such as ration cards.
Instead, the government will issue new Rs 500 and Rs 2000 notes.
However, all banks and ATMs will stay shut on November 9th and on November 10 in some places.
Electronic and card payments, however, will continue as normal. But withdrawals will be limited to Rs 10,000 daily and Rs 20,000 weekly until further notice. ATM withdrawals will be limited to Rs 2000 daily and will later be expanded to Rs 4000 a day. The limit will be gradually eased as the money supply increases, Modi said.
The move, Modi said, is aimed at curbing the menace of corruption, black money, counterfeiting and terrrorism; these denominations are among the most counterfeited.
The PM also said there would be restrictions on daily and weekly restrictions from bank ATMs.
For the next 72 hours, these denominations will continue to be accepted at state-run hospitals, airports, bus stands, railway stations, and ration shops. Families of patients will also be able to purchase medicines against prescriptions for the next 72 hours through November 11.
PM Modi said the move has been conducted with utmost secrecy and that most government departments did not have knowledge of this.
Syndication from DNA.