And just like that, two swaths of Indian currency are gone.
Prime Minister Narendra Modi has announced that the country’s 500-rupee and 1,000-rupee banknotes are no more, on the outs, and are being taken out of circulation.
As reported by the BBC, taking those notes out of the financial system represents an effort to stymie fraud efforts, corruption and what the site noted as “illegal cash holdings.” Modi stated that the illegal activities are among the “biggest obstacles in eradicating poverty” — with a bead being drawn on tax evaders, according to the BBC.
In place of the 500- and 1,000-rupee notes, a new set of 500-rupee and 2,000-rupee notes are being issued as replacements. Banks have 50 days to comply with the new directive, with individuals able to exchange those notes beginning Nov. 10 and extending through Dec. 30. As the site noted, earlier this year the Indian government garnered roughly $10 billion U.S. dollars through a tax amnesty program, through which Indian citizens were able to declare assets and income that had been previously hidden.
Separately, TheIndianExpress.com reported that smaller currency denominations would not be affected — and also that long lines had been queuing up at ATMs to withdraw cash in advance of bank closures slated for today.
In one initial reaction to the prime minister’s announcement, Naveen Surya, chairman of the Payment Council of India and managing director of ItzCash, said in a statement, “We welcome this extremely bold and much-needed step by Prime Minister Modi and the government to cure us from disease of cash in our society. I along with Payment Council and India and ItzCash greatly admire this move and provide our full support.”
Separately, in a statement released by Visa, T.R. Rakmachandran, group country manager for India and South Asia, said that “this is one of the most significant steps that we have seen so far towards India becoming a cashless society.”