Prime Minister Narendra Modi has announced that the existing 500 and 1,000 rupee banknotes will be withdrawn from the financial system overnight. The surprise move is part of a crackdown on corruption and illegal cash holdings, he said in a nationwide address on television.
New 500 and 2,000 rupee denomination notes will be issued to replace them. The move is designed to lock out money that is unaccounted for and may have been acquired corruptly, or being withheld from the tax authorities. It is seen as the boldest move by any Indian government to clamp down on tax evaders.
Banks have been told to exchange existing high denomination rupee notes over the next 50 days. People will be able to exchange their money at banks between 10 November and 30 December.
With Rs 500 and Rs 1,000 will be no longer legal tender after November 8, midnight. Here are the details you need to know:
What will happen to the old Rs 500, 1000 notes?
You have 50 days, from November 10 to December 30, to deposit Rs 500 and Rs 1,000 notes in any bank or post office. An ID proof like Aadhar Card, Passport, Bank Pass Book will have to be presented while depositing the notes. The money thus deposited in an account will remain with the account holder.
What will be the changes in ATM transaction limits?
In the first few days there will be a limit of Rs 2,000 per day per card. This will be raised to Rs 4,000 later. There will be a limit on withdrawal of Rs 10,000 per day and Rs 20,000 per week. This limit will be increased in the coming days. ATMs in the country will NOT work on November 9, and, at some places, on November 10.
What about emergency services?
From 72 hours from midnight of tonight i.e. till the midnight of November 11, government hospitals, railway and government bus counters, airline ticket counters, petrol/diesel/CNG pumps, state co-operatives, crematoria and burial grounds will continue to accept old notes. Consumers cooperative stores authorised by state or central government, state government authorised milk booths will accept the old Rs 500 and Rs 1000 notes.
Will there be a change in other forms of transaction?
There is no restriction on non-cash payments, including transactions by cheques, demand drafts, electronic fund transfers, debit and credit cards.
Will Rs 100 be the new highest denomination?
New notes of Rs 2,000 and Rs 500 will be circulated soon.
When will the new currency notes be available?
New Rs 500 and Rs 2000 denomination notes will be available from November 11. No new Rs 1000 notes will be issued by the Reserve Bank of India.