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Prime Minister Narendra Modi, in a sudden address to the nation on Tuesday, announced that Rs 500 and Rs 1,000 denomination notes are being withdrawn from midnight. He said that such notes will become "mere paper". Modi said this was being done to tackle the menace of black money in the country, which has sapped the economy.
He also said that ATM withdrawals will be restricted to Rs 2,000 per day till November 11, when this limit may be increased slowly. The Prime Minister said that the Rs 500 and Rs 1,000 denomination notes can be deposited in banks and post offices, and also exchanged across the bank counter by showing government-issued ID proof. Withdrawals from bank accounts will be limited to Rs 10,000 for the first few days.
Banks have also been ordered to remain shut on Wednesday, he said. Modi said that for medical patients, the old notes will be accepted. He also said that retail petrol pumps will accept such notes till November 11, after which the stations will have to keep a register of such notes for some time.
The decisions come after a cabinet meeting.
On November 9 and in some places November 10, ATMs will not work. He added that there will be no change in any other form of currency exchange be it cheque, DD, payment via credit or debit cards etc. Notes of Rs 2000 and Rs 500 will be circulated soon, RBI has decided to limit the notes with higher value.
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