In a bold attempt to curb black money, Prime Minister Narendra Modi on late Tuesday announced demonetization of Rs 500 and Rs 1000 currency notes, making them invalid in a major assault on corruption, black money, and fake currency.
The notification by the Department of Economic Affairs, Ministry of Finance published in the Gazette of India read: "The Central Government declared that the bank notes of existing series of denomination of the value of five hundred rupees and one thousand rupees, shall cease to be legal tender on and from the 9th November, 2016."
The Central Government also declared that the Rs 500 and Rs 1,000 notes shall "not be ceased to be legal tender between November 9 and 11" for providing public convenience in carrying out certain emergent and urgent transactions.
Although, the notification detailed that old Rs 500 and Rs 1,000 notes can be used for making payments in government hospitals, pharmacies in government hospitals, at railway ticketing counters, ticket counters of government or public sector undertakings buses and airline ticketing counters at airports for purchase of tickets.
"For purchases at consumer cooperative stores operated under authorisation of central or state governments; for purchase at milk booths operating under authorisation of the central or state governments; for purchase of petrol, diesel and gas at the stations operating under the authorisation of public sector oil marketing companies; for payments at crematoria and burial grounds."
In his televised address to the nation, Modi also announced that new notes of Rs 500 and Rs 2000 will be introduced soon. 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. He also expressed confidence that the staff of banks and post offices will rise to the occasion to introduce the new order within the available time.
For further information check the RBI (www.rbi.org.in) and GoI website (www.rbi.org.in).