Midnight strike on stash: New 500, 2,000 notes to be issued on Nov 10

New Delhi: Upstaging the US presidential elections and stumping political parties geared up for Assembly elections in Uttar Pradesh and Punjab, Prime Minister Narendra Modi in a disruptive but deft move took a giant step towards curbing black money by demonetising Rs 500 and Rs 1,000 currency notes.

In a surprise televised address to the nation, his first since taking over as PM, Mr Modi, after detailing how black money and counterfeit notes were being used to kill the Indian economy and fund terrorism, announced that Rs 500 and Rs 1,000 notes will be reduced to just “worthless pieces of paper” starting midnight, Tuesday. He detailed several exemptions and riders, and explained the procedure of the withdrawal of high denomination currency notes.

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. But banks will remain closed on Wednesday and ATMs will also not function on Wednesday and Thursday, Mr Modi said.

“Banks will be closed on November 9. It will cause some hardship to you... Let us ignore these hardships... In a 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,” Mr Modi said.

RBI governor Urijit Patel, addressing a press conference after the Prime Minister’s address, said the transition towards the new monetary regime would be made as smooth as possible.

The Prime Minister announced a 50-day demonetising road map under which people have time till December 31, 2016, to return their high value currency notes to banks.

Even as the withdrawal  of Rs 500 and Rs 1,000 notes is ongoing, the government will bring Rs 2,000 and Rs 500 notes on November 10, 2016, to facilitate easy replacement of the redundant ones. The new notes will have advanced security features that will enable their easy tracking.

Prime Minister Narendra Modi’s 40-minute address, first in Hindi and later in English, began at 8 pm, giving the nation less than four hours to react.
Queues outside ATMs across the country grew by the seconds even as the PM was speaking.

The historic move, being called a “surgical strike” on black money, will hit hoarders of black money hard and put political parties in the dock ahead of the crucial elections in Uttar Pradesh and Punjab as slush funds fuel campaigns.