Demonetization of 500 and 1000 Rupees Notes in India
By Team Legistify / 2016-11-10
On 8 November 2016, the Government of India announced the demonetization, commonly called notebandi, of all Rs. 500 and Rs. 1,000 banknotes of the Mahatma Gandhi Series. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism. The sudden nature of the announcement and the prolonged cash shortages in the weeks that followed created significant disruption throughout the economy, threatening economic output.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


Last evening, our Prime Minister Shri Narendra Modi shook the nation by stating the demonetizing Rs. 500 and 1000 notes. These guidelines have been made by the Reserve Bank of India commencing on 9th November 2016. The streets of India have been bustling with this news. The ATM’s, as well as bank, has been closed for next two days causing a panic amongst people. There were long queues outside ATM’s in the middle of the night on 8th November 2016. PM pointed out that a large number of counterfeit currency notes of Rs 500 and Rs 1000 notes were in circulation. They are being used to fund terror activities. Further 500 and 1000 notes are mostly used as black money.

Causes of Demonetization

  • Curbing terrorism
  • Removal of black money market
  • Curtailing parallel economy
  • Restraining money laundering
  • Rooting out corruption
  • End of fake currency

Procedure and Exceptions

After the announcement by the Prime Minister, the Governor of RBI Urjit Patel made a press release stating the procedure of exchanging the 500 and 1000 notes at the banks and post offices that are currently in circulation.  There were also certain exceptions stated by him keeping in mind the minimum daily requirements of the citizens of India.

On 8 November 2016, the Government of India announced the demonetization, commonly called notebandi, of all Rs. 500 and Rs. 1,000 banknotes of the Mahatma Gandhi Series. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism. The sudden nature of the announcement and the prolonged cash shortages in the weeks that followed created significant disruption throughout the economy, threatening economic output.

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


Related Posts

Read Our Blogs on Similar Topics