“Let us together fight this war against corruption& #blackmoney!”. Modi said new notes of Rs 2000 and Rs. 500 will be circulated soon, adding that RBI has made a decision to limit the notes with higher value.
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He linked fake currency to terrorism and questioned how enemies of the countries are using such methods to harm India. Holders have until the end of the year to tender currency and they will get back up to $60 per person in cash. Hats off to our prime minister for the bold decision.
However, he said 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. The limit will be raised to Rs.4000/- per day per card from 19th November 2016 onwards. That will be increased from then to December 30.
Banks have been told to exchange scrapped denominations until March 31, after which depositors have to furnish identity proof.
ATMs, at some places, will remain closed on two days, November 9 and 10. “Very few such moments come in life”, Modi said on Tuesday. The black market boosts corruption and is used to fund terrorism, he said. It’s a move that can easily nip the black money emergence in bud. More high-value notes have entered the system lately.
The Indian government announces the withdrawal from circulation of large denomination rupee currency notes, aiming to crack down on corruption and counterfeit currency.
West Bengal Chief Minister Mamata Banerjee called it “draconian” and demanded its withdrawal. Even though Prime Minister Modi is generally being lauded for his efforts to curb black money, uncertainty may impact stock markets, especially banking stocks. Thus, the note of Rs 2,000 will be easily traceable.
Reuters also said the surprise step appears created to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy, as well as hit the finances of Islamist militants who target India and are suspected of using fake 500 rupee notes to fund operations.
The RBI has also started a helpline number for the citizens who may face any difficulties, economic affairs secretary Shaktikanta Das said. “The government officials should keep a watch on them”, he said. India is already mulling a ban on large cash transactions.
“It’s a hugely positive development”, said Snapdeal CEO Kunal Bahl.
Digital wallet companies as well as ecommerce startups have welcomed this move. In outcome, the withdrawn old high denomination notes can not be used for transacting business and/or store of value for future usage. “The evil of corruption has been spread by certain sections of society” who he said had ignored the poor and cornered all the benefits.
The prime minister said that the move was also created to counter Pakistan-based extremist groups who carry out attacks on India, saying “enemies from across the border” were financing their activities by mass producing counterfeit Indian notes.
As far as real estate is concerned there have been studies which say that atleast 30 per cent of Indian real estate is funded by black money.
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Here is everything that you need to know about when and for how long ATMs and banks will be closed, and when they will finally reopen, and how they will function when they eventually do open for business.
