CHENNAI: Even before Prime Minister Narendra Modi finished his televised speech about withdrawing `500 and `1,000 currency notes from circulation, there were long queues outside ATM kiosks across the city, crowded by people who knew only two things: these notes were out, and banks and ATMs will not work on Wednesday.
What added to their confusion was shops, hotels and petrol bunks refusing the notes.
“I was tipped off by my friend that ATMs will be closed for two days from midnight,” said Suresh, one of the anxious persons who was seen outside Axis Bank ATM in Koyambedu on Tuesday night.
Travellers are another group who would be largely unaware of the move, noted a city resident, whose father was on a train from Jaipur. “He must be unaware. My worry is how he will survive the two-day journey,” he added.
The worst affected are the traders who are scared they will lose their daily business for the next two days. “With the sudden clamp, we don’t know how the transactions will happen,” rued Bhaskar, an onion trader in Koyambedu market where transactions happen only in cash.
“What will I do? I have currencies in the denomination of `500 and `1,000. How would I carry out my business tomorrow?,” wondered a concerned Vijayakumar, a shop owner in Koyambedu.
While common man was a tad uneasy, those from financial background were more measured in their reactions. Aashish, who deals with banking and financial services, said that the commodity market will be hit. “Prime Minister says 99 per cent of transaction in India is through cash. This will put people into tremendous hardship but then it is a welcome sign as it will put an end to black money,” he said.
“It is commendable, but there are many buts. In a nutshell the move will bring ordinary cash transaction to standstill. The message will take time to reach the remote villages,” said Soma Valliappan, an expert in financial investments.
Money matters
Paper currency, introduced in 18th Century by Banks of Madras, Bombay and Bengal, was under the central government through the Paper Currency Act (1861), till the establishment of RBI in 1935. A look at its journey
The central banker printed Rs 5 currency note for the first time in 1938, and followed it with Rs 10, Rs 100, Rs 1,000 and Rs 10,000 in the same year
The RBI has the authority to issue currency up to Rs 10,000 denomination
Rs 1, Rs 2, Rs 5 notes were withdrawn after making these denominations exclusively coins
Rs 1,000 and Rs 10,000 notes were demonetised in 1946. These were reintroduced in 1954, when RBI also issued a new denomiation - Rs 5,000. But in 1978, the government decided to withdraw Rs 5,000 and Rs 10,000
Rs 17.54 lakh crore worth of notes in circulation now. In terms of value, Rs 500 notes form about 45 per cent of this, while Rs 1,000 notes account for 39 per cent. In terms of volume, the number of notes in circulation, Rs 10 and Rs 100 notes form 53 per cent