All your questions answered.
Taking the nation by surprise, Prime Minister Narendra Modi on Tuesday night announced withdrawal of Rs 1000 and Rs 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption. In his first televised address to the nation, Modi said people holding notes of Rs 500 and Rs 1000 can deposit the same in their bank and post office accounts from November 10 till December 30.
In his 40-minute address, first in Hindi and later in English, the Prime Minister said the notes of Rs 500 and Rs 1000 "will not be legal tender from midnight tonight" and these will be "just worthless piece of paper." However, he said that 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. He also announced that new notes of Rs 2000 and Rs 500 will be introduced.
What to do with the existing Rs 500 and Rs 1000 notes?
# Deposit old notes of Rs 500 or Rs 1000 in banks or post office accounts from November 10 till December 30, 2016 without any limit. 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.
# Exchange old notes of Rs 500 or Rs 1000 at any bank, head post office or sub-post office. Compulsory ID proof is required for this transaction. The limit for this will be Rs 4000 upto November 24.
# No restriction of any kind on non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.
# On November 9 and in some places on November 10 also, ATMs will not work. In the first few days, there will be a limit of Rs 2000 per day per card. This will be raised to Rs 4000 later.
Will essential services accept Rs 500 and Rs 1000 notes post 8th November?
To limit inconvenience for common people, some places will still accept the old Rs 500 and Rs 1000 notes till the midnight of November 11 and 12.
* For 72 hours, government hospitals will continue to accept old Rs 500 and Rs 1000 notes for payment.
* For 72 hours, railway ticket booking counters, ticket counters of government buses and airline ticket counters at airports will accept the old notes for purchase of tickets.
* For 72 hours, old Rs 500 and Rs 1000 notes will be accepted at
- petrol, diesel and gas stations authorised by public sector oil companies.
- consumer co-operative stores authorised by state or central govt
- milk booths authorised by State govts
* cremation and burial grounds
RBI will be shortly introducing new notes of denomination Rs500 and Rs 2000.
Here's all you need to know about the new notes
Rs 2000 note
See through register with denominational number 2000 can be seen when the note is held against light
Latent image with denominational number 2000 which can be seen when the banknote is held at a 45 degree angle at the eye level
Denominational numeral 2000 in Devnagari
Portrait of Mahatma Gandhi in the centre
Micro letters 'RBI' and '2000'
Colour shift windowed security thread with inscription 'Bharat' (in Devnagari), RBI and 2000. Colour of the thread changes from green to blue when the note is tilted.
Guarantee Clause, Governor's signature with Promise Clause and RBI emblem towards right
Mahatma Gandhi portrait and electrotype (2000) watermarks
Number panel with numericals growing from small to big on the top left side and bottom right side
Denominational numeral with Rupee Symbol, ~2000 in colour charging ink (green to blue) on bottom right
Ashoka Pillar emblem on the right
For visually impaired:
Intaglio or raised printing of Mahatma Gandhi portrait, Ashoka Pillar emblem, bleed lines and identification mark
Horizontal rectangle with ~2000
Seven angular bleed lines on left and right side in raised print
Reverse:
Year of printing of the note
Swachh Bharat logo with slogan
Language panel towards the centre
Motif of Mangalyaan - reflecting country's first venture in the interplanetary space
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Rs 500 note
The new Rs 500 notes are different from the present series in colour, size, theme, location of security features and design elements. The size of the new note is 63mm X 150mm. The colour of the notes is stone grey and predominant new theme is Indian heritage site - Red Fort.
Obverse:
# See through register in denomination numerical.
# Latent image of the denomination numerical
# Denomination numerical in Devnagari.
# Orientation and relative position of Mahatma Gandhi potrait changed.
# Windowed security thread changes colour from green to blue when note is lifted.
# Potrait and electrotype watermarks.
# Guarantee clause: Governor's signature with Promise clause and RBI emblem shifted towards right
# Number panel with numericals growing from small to big on the top left side and bottom right side.
# Denomination in numericals with Rupee symbol in colour changing ink (green to blue) on bottom right
# Ashoka pillar emblem on the right
Reverse:
# Year of printing of the note on left
# Swacch Bharat logo with slogan
# Language panel towards centre
# Red Fort - an image of Indian heritage site with Indian flag
# Denominaoon numeral in Devanagari on right
For visually impaired:
Intaglio or raised printing of Mahatma Gandhi potrait, Ashoka pillar emblem, bleed lines and identity marks to continue.
# Circle with Rs 500 raised print on right
# 5 raised lines on left and right in raised print
(Source: RBI)
Why this decision to scrap existing Rs 500 and Rs 1000 notes is a potential game changer
Less bang for your black bucks: Those with large amounts of large-denomination black money in cash will be hit hardest, since offloading this cash will become extremely difficult. Exchanging crores of rupees at banks will likely attract the attention of the taxman.
Less counterfeiting: These denominations were the most easily and widely counterfeited notes. Taking them out of circulation will eliminate a big source of fake notes.
Terrorism funding: A significant amount of terrorism was funded using counterfeit and/or high-denomination notes. This will also be hit badly.
Election funding: It is an open secret that elections in India are largely bankrolled by massive amounts of black money, typically in cash that are often used as direct bribes to voters. This spigot will now be shut off, disrupting the electoral system. The UP and Punjab elections will the first to face the brunt of this move.
Corruption: Most bribes across the system are typically paid in cash. While smaller amounts will not be affected, large amounts of bribes will now be limited, at least until the new denominations of Rs 500 and Rs 2000 are introduced in large numbers. But again, those will already accumulated cash will be hit hard.
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