Modi's surgical strike on black money; bans Rs 500, Rs 1000 denominations

In one fell swoop, Prime Minister Narendra Modi sucked the black money and counterfeit currency out of circulation in India by demonetising Rs 500 and Rs 1,000 notes, saying they were lubricating terror ops; announces timeline for phasing out banned notes

NEW DELHI: It was a surgical strike on black money, and thereby on corruption, fake currency and funds for terrorism. Addressing the nation late on Tuesday evening Prime Minister Narendra Modi announced that Rs 500 and Rs 1,000 notes would not be used starting midnight. Stating the move was essential in the fight against black money, Modi said the public could deposit their old notes at banks or post office accounts till December 30.  

“We want to take this fight against corruption further ahead,” Modi said, requesting the public to help make the move successful.  “The Rs 500 and Rs 1,000 notes will not be legal tender from Tuesday midnight. These will be just worthless piece of paper,” he said. Assuring people that the move will not result in people losing their money, he said that the step will strengthen the hands of the common man in the fight against black money. To minimise the inconvenience caused, the government decided to give a linger extention for essential services like hospitals, railway reservations, airports and petrol pumps. These services will continue to accept the old denominations for the next 72 hours, but will have to maintain strict records.

Throughout his entire ‘address to the nation’, the Prime Minister kept reiterating that these decisions would fully protect the interests of honest and hard-working citizens. He also said that notes hoarded by anti-national and anti-social elements would now become worthless pieces of paper. “There is a need for a decisive war against the menace of corruption, black money and terrorism which are festering wounds that make the country hollow from within. These are the activities that hold back our nation’s progress,” he said. Describing illegal financial activities as the “biggest blot”, Modi said that despite several steps taken by his government over the last two-and-a-half years, India’s global ranking on corruption had moved only to 76th position from 100th earlier.

“This shows the extent of the web of corruption in the country. The disease of corruption is the domain of some  people who are flourishing. Some people have misused their positions and benefitted. On the other hand, honest people are suffering,” he said. The Prime Minister added the steps taken by the Government would strengthen the hands of the common citizens in the fight against corruption, black money and counterfeit notes.

On black money’s link to terrorism, Modi said that enemies from across the border were running their operations using fake currency notes. “This has been going on for many years. Many times, those using fake Rs 500 and Rs 1000 notes have been caught and many such notes have been seized,” he said. “Those unable to deposit their old notes by December 30, can approach specified offices of the RBI up to March  31, 2017 and deposit the notes after submitting a declaration form,” the Prime Minister added.
Officials said there were 6.7 billion  pieces of Rs 1000 notes in circulation and 16.5 billion pieces of Rs 500. Bankers and industry leaders welcomed the move as “a bold and revolutionary” step. “We will strive to restock ATMs  at the earliest and make them operational,” SBI Chairperson Arundhati Bhattacharya said.

KEY POINTERS:

• Rs 500 , Rs 1,000 notes out of circulation
• Rs 2,000 , Rs 500 new notes to be released from Nov 10
• 30 December last date to deposit old notes
• 72 hours key services like hospitals, petrol pumps, railway reservations, airports and crematoriums will accept old notes