Rupees 500 and 1000 denomination notes are no more a legal tender : Union Government - (08 Nov 2016)

Banking

The Prime Minister of India in a surprise move announced demonetization rupees 500 and 1000 denomination notes with effect from midnight of 8th November 2016. The announcement came as a shock as well as a welcome move to the citizens of the nation as it is one of the biggest steps in terms of finance in recent times taken by any government. Indeed, this step was long due and was to be considered an effective tool to root out the menace of corruption, black money and fake currency from the country. However, the existing currency notes of 100, 50, 20, 10, 5 and 2 are remain valid. The Central Government has announced that old Rs. 500 & Rs. 1,000 notes must be deposited by persons holding it in their bank or post office accounts from 10th November till 30th December 2016 without any limit. The Government has further made it clear that those people who are not able to deposit their old notes of 500 and 1000 denomination upto 30th December 2016, they can approach the specified offices of Reserve Bank of India up to 31st March 2017 and deposit the notes after submitting a declaration form.

The Government has made immediate arrangements and announced that old 500 & 1,000 notes can be exchanged in any bank, head post office or sub post office by showing identity proof like Aadhaar card, voter card, ration card, passport, PAN card or other approved proofs. However, the limit for such exchange was initially four thousand rupees till 24th November, which is now further increased to Rs.4,500 and shall further increase in coming weeks till 30th December 2016. The Reserve Bank of India (RBI) has issued new Rs. 2,000 notes from 10 November 2016 and also bringing new 500 denomination notes. The non-cash payments such as cheques, demand drafts, debit or credit cards and electronic fund transfer are non-effected and they continue to be in force.

The Reserve Bank of India (RBI) has issued new series of notes for 500 rupees and 2,000 rupees denomination with improved features and newer sizes. The design of new notes is very user-friendly for visually-impaired being Braille-compliant with lines on the side that enable blind people to ascertain their denomination easily. The said step is also necessary in wake of large scale hoarding of black money arising from corruption and large scale of counterfeiting of old 500 and 1000 rupees which was constantly causing threats to financial stability of the country. By replacing the old notes Government aims to curb the menace of counterfeiting for the purpose of terrorist activities and also putting brakes on black money.

A 2,000 rupees note denomination has been issued by the Reserve Bank of India for the first time in India. It will be called as the ‘Mahatma Gandhi (New) Series’. The base colour of the note is magenta and has a picture of Mangalayan, the low-cost mission of ISRO to Mars on the reverse side and Mahatma Gandhi on front side. A 500 rupee note has a different colour, size, theme, design and location of security features compared to the old notes. It has portrait and electrotype watermarks. It will be in a stone grey in colour. The motif Delhi’s Red Fort is on reverse side and Mahatma Gandhi on front side.

The Central Government has assured to handle the problems faced by the people across the country in exchanging, depositing and withdrawing their money from banks, however the task is bit humongous and requires great amount of efforts of the government and banks and patience by the people.

Tags : RUPEES DE-MONETISATION BLACK MONEY