Ban on 500/- and 1000/- notes : A GIANT MOVE TOWARDS A GIGANTIC ISSUE
Rs 500 and rs 1000 notes cease to be legal tender and new notes of rs 500 and rs 2000 under use
PM Modi in an announcement on Tuesday declares that rs.500 and rs 1000 notes will not be legal from the midnight of November 8th in order to eradicate corruption and curb the issue of black money. Other currency notes are valid along with all coins.
Right from the beginning of the NDA government’s rule, there have been significant moves towards the eradication of corruption and black money. Unearthing black money has been one of the significant schemes that were adopted by the NDA government. Disclosing black money and punishment for the black money holders have been important aspects of the scheme.The battle against corruption began by setting up an SIT(Special Investigation Team) on black money which means seeking court’s directions to help bring back the black money stashed in tax havens abroad and initiate efforts to strengthen the governance framework to prevent further creation of black money.
A law passed in 2015 for disclosure of foreign black money within 3 months by paying 60% tax. Along with the USA, many other countries have agreed to share the banking information. A strict law was brought into force from august 2016 in order it curbs Benami transactions which are used to deploy black money earned through corruption. A scheme was introduced for declaring black money after paying a stiff penalty. This was called The Income Declaration Scheme or Black Money Disclosure Scheme. Around 65,250 crores were declared as black money by 64,275 declarants roughly rounding around 1 crore per declarant. Also, around 56,378 crores of undetected income have been uncovered through search operations.
The ban on rs 500 and rs 1000 notes and the introduction of new notes with advanced technology embedded in them has been recognized as a massive step towards pivotal and progressive change in the country’s economy.
Important statements from the announcement
- Rs 500 and rs 1000 notes will no longer be legal.
- People can deposit their notes in banks and post offices from November 10thto December 30th
- Valid Id card such as passport,PANcard, voter Id card or Aadhaar card needs to be shown while depositing.
- Banks will note function on November 9th
- ATMs will not function on November 9th and 10th
- RBI to launch new notes of rs 500 and rs 2000 from November 10th
- No changes in cheques, debit cards, demand drafts and e-transactions.
Ban on 500/- and 1000/- notes Exceptions
- The rs 500 and rs 1,000 notes will be accepted for 72 extra hours i.e., till midnight of November 11th in hospitals, railway ticket booking counters, government bus stands, airports, petrol, diesel and gas stations authorised by public sector oil companies, consumer co-operative stores authorised by state and central government, milk booths authorised by state governments, crematoria and burial grounds.
- Those who cannot deposit the money before 30th of December can exchange it at Reserve Bank of India by providing a declaration. This lasts until March 31st, 2017.
For exchange in bank and post office : From November 10th to 24th, a maximum limit is rs 4000.From November 25th to December 30th the limit exceeds more than 4000 rupees.
For the deposit of old notes in bank and post office : It can be done between November 10th to December 30th with no limit. One needs to carry a valid bank account or a post office saving account.
For withdrawal from bank and post office : Maximum limit from November 10th is 10,000 rupees per day and 20,000 rupees per week. One needs to carry a withdrawal slip and cheque.
For withdrawal from ATM : From November 10th to 18th maximum limit of the amount is Rs 2000. From November 19th onwards, a maximum limit of an amount for withdrawal is rs 4000. One needs to carry an ATM card.
*Control rooms formed in RBI in Mumbai will be operable from November 9th, 8am – 022 22602201, 22602944
This revolutionary step by PM Modi has been gaining accolades from eminent personalities including Chanda Kochhar, CEO, and MD of ICICI Bank, Baba Ramdev, Yoga Guru, Amitabh Bachchan , an eminent actor of Indian Cinema etc. “This is a bold, powerful and decisive step to stop the use of black money,” said Shaktikanta Das, Secretary of Department of Economic Affairs. As the announcement created panic in public, a tweet, from the President of India, saying not to worry and follow the guidelines, was out.
“Corruption, black money, and terrorism can come in the way of a country’s robust economic growth, they are the biggest hindrances in the fight against poverty,” says the PM adding that it’s everyone’s responsibility to eradicate poverty.
Though this step by the PM has gained numerous accolades from various sections of the society, the fact that there have been many queries questioning the actual and genuine influence of this act on the country’s economy can’t be denied.Many opposition parties have criticized the idea saying the NDA government has taken such a step in order to hide their failure in curbing the issue of corruption. Also, numerous trolls by ‘netizens’ have been hovering in social media since the announcement.Despite all of these , the changes that follow the practice of this new scheme will surely have a huge impact on the country’s economy, whether it’s going to be a positive or a negative one is not clear at this moment.
RBI to issue new rs 500 and rs 2,000 notes.WHY?
Every Rs. 2000 currency note is embedded with an NGC (Nano GPS Chip)
The unique feature of the NGC is that it doesn’t need any power source. It only acts as a signal reflector. When a Satellite sends a signal requesting location, the NGC reflects back the signal, giving precise location and the serial number of the currency back to the satellite, making it easy to track the notes even if they are kept 120 meters below the ground. The NGC can’t is tampered with or removed without damaging the currency note.
Since every NGC embedded currency can be tracked. The satellite can identify the exact amount of money stored at a certain location. If a relatively high concentration of currency is found in a certain location for a longer period of time at other than banks & other financial institutions, the information will be passed on to the Income Tax Department for further investigation.