In an initiative to restrict the spread of counterfeit notes and black money in India, the PM of India, Narendra Modi, announced the abolition of Rs 500 and Rs 1000 currency notes with effect from 8th November midnight. This demonetization of the currency notes is seen as a major strike on the fake currency, black money and corruption prevailing in the country. According to his address to the nation that was aired tonight, the PM said that the people having custody of Rs 500 and Rs 1000 notes can get them deposited in their bank accounts and post offices from November 10, 2016 to December 30, 2016. He also said that the notes of lower denomination like Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 will continue to be accepted. Moreover, the coins will also remain valid. Also read, Top 5 Political events that took the people by storm.
Prime Minister Narendra Modi, addressed the country and stated “Currency notes of Rs 1000 and Rs 500 will be just paper with no value”. According to him, these currency notes will hold no value post midnight.
Let us assess what difficulties the common people will have to face in the upcoming days:
ATMs will not operate on November 9 and 10. This means that if you who do not have cash with you right now, you will only be able to withdraw cash today only. Whilst the cashless transaction will not be hindered, it will be problematic for the people to do transactions where cash is ultimately necessary.
On November 9, all the banks across India will remain closed for the public work. If you were thinking of going to bank tomorrow, drop the idea and make a visit day after tomorrow.
Even though the cashless transaction has not been affected by the new imposition, small businesses which do not support cashless transactions will definitely face loss of business. Since the people will head to shopping marts for doing daily shopping, the local vendors will be highly affected.
Whilst these were some of the parameters that will prove to be troublesome for the common Indian masses, the PM has made sure that there are a bright side to this decision as well:
There would be no restrictions on any of the cashless transactions or payments done by the people. The non-cash payments initiated via Demand Draft, Cheques, Debit/Credit Cards as well as the electronic fund transfers will be done without any issues.
In order to aid the daily commuters, the notes will continue to be accepted on the petrol pumps. So if you drive your own vehicle, take a sigh of relief. However, it will be mandatory for the petrol pumps to record every entry of cash transaction done via Rs 100 and Rs 500 notes.
When it comes to the health sector, Rs 500 and Rs 1000 currency notes will be accepted in the government hospitals as well as in chemist shops. This will ensure that the patients need not suffer due to this new rule.
The milk booths and the consumer cooperative stores run by the state or Central government will be exempted from this rule. So, if you have any state-run milk booth or consumer store near you, hurry up with your Rs 500 notes and grab before the stock finishes.
Keeping in mind the common masses who commutes via railway, airline or bus, the PM has exempted the modes of transport from this new rule. The currency notes will be accepted in the ticket booking counters of Railways, Airways and the Roadways.
However, there is a caveat to this situation. The old notes will only be accepted in all the above-mentioned places until November 11, 2016 only, After that, the currency notes will not hold validity.
As per the statements released by the Reserve Bank of India, the revamped currency note of Rs 500 and the all-new currency note of Rs 2000, will be unveiled on 10 November 2016. Whilst the Rs 500 note will be Green in color, Rs 2000 note will be Pink.
Shaktikanta Das, Economic Affairs Secretary, stated that the new series of Rs 500 currency notes will be designated as the ‘Mahatma Gandhi’ series of bank notes. Moreover, an image of Red Fort will also be embellished on them.Have a look at the currency notes which will be coming out soon: Know more about the features of these new notes.
The scrapping of the currency notes of the highest denomination is being asserted as bold move on the part of the Indian Government. This decision will prove to be a fatal blow to the bank accounts filled up with black money.
As per the database released by the Reserve Bank of India on the Indian economy, at present currency notes of worth Rs 17,54,000 crore is in circulation. Out of the total value, nearly 45% of the currency is taken up by Rs 500 currency notes and 39% is being held up by Rs 1000 currency notes.
However, when talking about the volume of the currency notes that are currently in circulation around the country, around 53% of the notes are of Rs 100 and Rs 10 currency notes, collectively.
The abolishment of Rs 1000 and Rs 500 currency notes will directly imply that past midnight nearly Rs 6,32,600 crore of money that is currently in the circulation in the formation of Rs 1000 notes, will be illegal tender. In replacement of Rs 1000 notes, notes of Rs 2000 will be introduced from November 10, which as per the government will not be highly circulated.
As per the data release by the RBI of the fiscal year 2016, nearly 6.5 lakh counterfeit currency notes were discerned in the commercial Indian banks. Out of the total count of notes, around 4 lakh notes were constituted by Rs 1000 and Rs 500 currency notes.
Owing to this very reason, the Indian government has taken this step of re-monetization of the currency notes of Rs 500 and complete de-monetization of Rs 1000 currency notes.
So for all the commoners out there, do not panic, as your money will not go anywhere. Lets join our hands to fight back the corruption that has been prevalent in our country since decades. Stay tuned for more updates.