Taking the nation by surprise, Prime Minister Narendra Modi on Tuesday night announced demonetisation of Rs 1000 and Rs 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption.
In his first televised address to the nation, Modi said people holding notes of Rs 500 and Rs 1000 can deposit the same in their bank and post office accounts from November 10 till December 30.
In his 40-minute address, first in Hindi and later in English, the Prime Minister said the notes of Rs 500 and Rs 1000 “will not be legal tender from midnight tonight” and these will be “just worthless piece of paper.”
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.
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.
He also expressed confidence that political parties, workers, social organisations and the media will go further than the government in making it a success.
Besides depositing money in bank accounts, the Rs 500 and Rs 1000 notes can also be exchanged with lower denomination currency notes at designated banks and post offices on production of valid government identity cards like PAN, Aadhaar and Election Card from November 10 to November 24 with a daily limit of Rs 4000.
Those unable to deposit Rs 1000 and Rs 500 notes till December 30 this year can do so in designated RBI offices till March 31 next year after filling a declaration form along with proof and reasons, the Prime Minister said.
Rs 500 and Rs 1000 notes will be valid for transactions related to booking of air tickets, railway bookings, government bus ticket counters and hospitals till the midnight of November 11 and 12.
“Banks will be closed tomorrow. It will cause some hardship to you….Let us ignore these hardships… In country’s history, there comes a moment when people will want to participate in the nation building and reconstruction. Very few such moments come in life,” Modi said.
Here are the highlights:
- On November 9, all banks will remain closed for public work
- New Rs 2,000 and Rs 500 notes issued
In Pics: New Rs 500 note that will be issued pic.twitter.com/N51HDChDs3
— ANI (@ANI) November 8, 2016
In Pics: New Rs 2000 Note that will be issued pic.twitter.com/4NXhNOpxxA
— ANI (@ANI) November 8, 2016
- So let’s continue the process of cleanliness and work together for successful completion of this initiative
- Notes of Rs 2000 and Rs 500 will be circulated soon, RBI has decided to limit the notes with higher value
- On November 9 and in some places November 10, ATMs will not work
- People can deposit notes of Rs1,000 and Rs 500 in their banks from November 10 till December 30, 2016
- Those who can’t deposit by 30 December can do so until 31 Match but will be required to produce ID proof.
- You have 50 days (From 10 Nov to 30 Dec) to deposit notes of Rs 500 & Rs 1000 in any Bank or Post office
- From Midnight Nov 8, 2016 today, Rs500 and Rs1000 notes are no longer legal tender
- The process of cash circulation is directly related to corruption in our country impacting the lower classes of our society
- Respite for people for the initial 72 hours, govt hospitals will accept old Rs 500 and 1000 notes till 11 November midnight
- Seema paar ke humare shatru jaali noton ke zariye apna dhandha Bharat mein chalate hein aur ye saalon se chal raha hai
- There will be no change in any other form of currency exchange be it cheque, DD, payment via credit or debit cards etc
Some early reactions:
Decision to scrap Rs 500 and Rs 1,000 notes very good to combat black money: SIT Chairman Justice (retd) M B Shah
Either Mr @narendramodi has been remarkably wise or crazily foolish. The jury is still out! #ModiAddresesNation
— Rajdeep Sardesai (@sardesairajdeep) November 8, 2016
Big Brother announcement a la Indira Gandhi. If it works to clean up black money, great. If it doesn't there will be mass pain for nothing
— Sagarika Ghose (@sagarikaghose) November 8, 2016
Assume Bjp's trader base is thrilled. ₹ 1000 is a good idea!
— Swati Chaturvedi (@bainjal) November 8, 2016
Stunned. First thought is for house-help, hawkers, labourers. All paid in cash. How will they tide over this change!
— Preeti Sharma Menon (@PreetiSMenon) November 8, 2016
Either this is the smartest thing this Govt has done or the dumbest. At this time even experts can't figure out which it will turn out to be
— Rahul Kanwal (@rahulkanwal) November 8, 2016
Wait. So if this 500 and 1000 rupees are being scrapped to deal with terrorism (?) How does a 2k note help? Genuinely asking
— Sandhya Menon (@TheRestlessQuil) November 8, 2016
Majority of Black money stocked in Swiss francs in Swiss Banks. Uska kaya hoga???
— Farah Khan (@FarahKhanAli) November 8, 2016