In a significant measure to counter black money and fake currency notes in the Indian economy, the government on Tuesday announced the scrapping of 500 and 1000 denomination currency notes.
Prime Minister Narendra Modi, in an address to the nation, said the decision to de-recognise the notes will come into effect from midnight November 8.
"The currency notes of Rs 1000 and Rs 500 will be just paper with no value," said Modi.
He advised the people to declare any currency or cash, which would not remain legal once the order comes into effect, with the banks from November 10 till December 30, 2016.
For those unable to deposit their notes of Rs 1000 and Rs 500 by December 30 for some reason, they can change the notes till March 31, 2017 by furnishing ID proof.
Besides depositing money in bank accounts, the Rs 500 and Rs 1000 notes can also be exchanged with lower denomination currency notes at designated banks and post offices on production of valid government identity cards like PAN, Aadhaar and Election Card from November 10 to November 24 with a daily limit of Rs 4000.
The Prime Minister said the government had succeeded in unearthing black money to the tune of $19 billion during the last two and a half years. But emphasised that the problem of corruption is deep-rooted in the country.
He urged all sections of the society and the media to help make the new measures successful. He also said that the government will soon introduce new currency notes of Rs 2000 and Rs 500 denominations.
Indian broadcasting agency Prasar Bharati tweeted the images of the new currency notes that are likely to be issued soon.
The Prime Minister told that the central bank, the Reserve Bank of India has decided to shut all banks for public transactions tomorrow. Some ATMs will also not function tomorrow and day after as RBI stocks banks and ATM machines with lower denomination notes.
ATM withdrawals will be restricted to Rs 2000 per day and withdrawals from bank accounts will be limited to Rs 10,000 a day and Rs 20,000 a week.
"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.
Rs 500 and Rs 1000 notes will be valid for transactions related to booking of air tickets, railway bookings, government bus ticket counters and hospitals till the midnight of November 11 and 12.