New Delhi
High denomination notes of Rs 500 and Rs 1,000 will no longer be legal tender from Tuesday midnight, as Prime Minister Narendra Modi announced as he declared a “decisive” war against black money and corruption while disclosing a raft of steps to assure commoners that their money is safe.
In his first televised address to the nation two-and-a-half-years after assuming office, he announced a 50-day window from November 10 to December 30 for those having these notes to deposit them in their bank and post office accounts “without any limit”.
He also said that new notes of Rs 2,000 and Rs 500, with a completely new design, will be introduced. Officials said such notes have already been reached to banks to prepare for their circulation from November 10.
“Based on past experience, the RBI will hereafter make arrangements to limit the share of high denomination notes in the total currency in circulation,” Modi said.
Banks will remain closed on Wednesday and ATMs will also not function on Wednesday and in some places on November 10 also.
In the first few days, there will be a withdrawal limit of Rs 2,000 per day per ATM card. This will be raised to Rs 4,000 later. This limit will be increased in the coming days.
`500 and ` 1,000 notes can also be exchanged for lower denomination currency at bank counters and select post offices till November 24 with a cap of ` 4,000 per day. From November 25, the cap will be raised.
Banks will open additional counters and work for additional hours to deal with the rush of people wanting to deposit or change notes.
There may be some who, for some reason, are not able to deposit their old ` 500 or `1,000 notes by December 30, 2016, he said, adding they can go to specified offices of the RBI up to March 31, 2017 and deposit the notes after submitting a declaration form.
Officials said there were 6.7 billion pieces of `1,000 notes in circulation and 16.5 billion pieces of ` 500.
In his address, first in Hindi and later in English, Modi, whose government had implemented two schemes for unearthing of black money both domestic and abroad, said `1.25 lakh crore belonging to the “corrupt” people has already been brought out in the open.
“There comes a time in the history of a country’s development when a need is felt for a strong and decisive step,” he said, asking political parties, all governments, social organisations and media to participate in the war against black money “with enthusiasm to make it a success”. He conceded that there could be some inconvenience to people in implementing the measures.
The notes of `500 and `1000 “will not be legal tender from midnight tonight” and these will be “just worthless piece of paper,” Modi said. However, he said that all notes in lower denomination and all coins will continue to be valid.
MONEY WISE: THE WAY FORWARD
Deposit old notes of `500, 1000 in banks, post offices between Nov 10 & Dec 30, 2016
Exchange notes till March 31, 2017 at specified RBI offices with declaration
Limit of `10,000 per day & `20,000 per week on withdrawals
ATM withdrawal limit 2,000 per day per card
`500, `1000 notes accepted at hospitals, drug stores till Nov 12
Tourists, travellers can change currency notes at airports
Notes can be used at designated fuelling stations till November 12
Petrol pumps to keep entries of cash transaction with `500, 1,000 notes till Nov 11
ATMs to be closed on November 9 and at some places on November 10 as well
