SAN FRANCISCO (Diya TV) — The Indian government announced Monday the country will halt the use of Rs500 and Rs1,000 currency notes beginning immediately Wednesday.
During a televised address Monday, Prime Minister Narendra Modi said the measure is being taken in an effort to curb the flow of black money in the country, as well as curtail the counterfeiting of notes in Asia’s third-largest economy. The government will issue new Rs500 and Rs2,000 denomination notes.
Account holders can deposit Rs500 and Rs1000 notes in banks and post offices over the next 50 days with proof of identification such as a PAN card or an Aadhaar card. Indian ATMs will not be in operation on Nov. 9 and 10 to facilitate the change, banks in the country will also remained closed Wednesday.
The move is being viewed as the largest by the Modi administration to stop the circulation of illegal currency in the country, a pillar of the Bharatiya Janata Party’s poll manifesto in 2014. Earlier in his term, Modi opened an amnesty program, allowing residents to declare their illegal wealth by the end of Sept. 2016, in order to avoid possible legal action being taken against them.
By Oct. 1, just Rs65,250 crore worth of black money was collected.
Modi also said the move will serve as an immediate impact on the financing of terrorism and such activities in India. Terrorist groups often fund themselves with black money, Modi said.
“The Rs500 and Rs1000 notes hoarded by anti-national, antisocial elements will become worthless piece of paper,” Modi said. “There is no need for panic. Your money will remain yours.”
Currently India’s black money economy is about 20% of its GDP, according to estimates from Ambit Research. Apart from cash, Indians also hoard wealth worth over billions of dollars in the form of gold.
