All you need to know: ₹500, ₹1000 notes to be invalid
- The announcement was a surprise to even banks, who were not informed.
- An extensive system has been put in place to exchange the notes.
- New ₹500, ₹2000 notes will be issued shortly.
Taking the nation by surprise, Prime Minister Narendra Modi tonight announced demonetization of ₹1000 and ₹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 ₹500 and ₹1000 can deposit the same in their bank and post office accounts from November 10.
Here are the important highlights:
- ₹500, ₹1000 notes will no longer be legal currency from midnight tonight.
- Government hospitals and pharmacies, railways, airports will accept the notes until midnight November 11.
- All Banks, and some ATMS, will be closed tomorrow to stock notes.
- Consumers may deposit any amount of ₹500, ₹1000 notes into their bank accounts for the next 50 days.
- For emergencies, consumers may approach any bank or post office and exchange up to ₹4000 per day, via a valid government ID (Aadhar, Pan Card etc.), from November 10 to November 24.
- New ₹500 and ₹2000 notes will be issued shortly.
- A temporary restriction on withdrawals will be imposed. ₹10,000 per day and only ₹20,000 per week.
- ATM withdrawals will be restricted to ₹2000 per day
- Those unable to deposit ₹1000 and ₹500 notes till December 30 this year can do so in designated RBI offices till March 31 next year after filing a declaration form along with proof and reasons.
In his 40-minute address, first in Hindi and later in English, the Prime Minister said the notes of ₹500 and ₹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 ₹100, ₹50, ₹20, ₹10, ₹5, ₹2 and ₹1 and all coins will continue to be valid.
He also announced that new notes of ₹2000 and ₹500 will be introduced.
ATM withdrawals will be restricted to ₹2000 per day and withdrawals from bank accounts will be limited to ₹10,000 a day and ₹20,000 a week. Banks will remain closed tomorrow and ATMs will also not function tomorrow and day after, Modi said.
He expressed confidence that the staff of banks and post offices will rise to the occasion to introduce the new order within the available time. He also expressed confidence that political parties, workers, social organisations and the media will go further than the government in making it a success.
"Banks will be closed tomorrow. It will cause some hardship to you....Let us ignore these hardships... In 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," Modi said.