India scraps 500 and 1000 rupee notes

Posted on November 8, 2016

Current notes worth 500 and 1,000 rupees will cease to be legal tender in India from midnight on Tuesday, Narendra Modi has announced, in a shock move he says is designed to tackle funding for terrorism.

India’s prime minister said on Tuesday night that higher value notes – worth around $7.50 and $15 – would not be usable, giving people in the country less than four hours’ notice of the change, write Kiran Stacey and Amy Kazmin in New Delhi.

But he added that the Reserve Bank of India would release new high value notes – with higher security features – in the denominations of Rs500 and Rs2000 from Thursday, after a bank holiday on Wednesday.

Shaktikanta Das, revenue secretary, said other notes of 10, 20 and 1,000 rupees would be produced “in due course”.

Mr Modi said in a televised speech that the higher denomination notes are used on the black market and to fund terrorist activity.

Urjit Patel, the recently appointed governor of the Reserve Bank of India, said the central bank supported the move, which he said would achieve ‘multiple objectives.’

“We should be ready to meet such a requirement in the days and weeks to come,” Mr Patel said at a press conference.

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