India’s demonetization of Rs. 500 and Rs. 1000 notes — What it means for you

“These notes are just paper from tomorrow” — Prime Minister Narendra Modi

What’s all this buzz about? What is going on?

Rs. 1000 and Rs. 500 notes are invalid, starting midnight, Nov 8, 2016. They are no longer valid legal tender, which means you can’t use them to pay for goods or services.

Why is the government doing this?

To fight black money. People were given a chance to disclose their black money and pay taxes for it by September 30, 2016. The ones who did not are sitting on huge pile of cash, made up mostly of Rs. 1000 and Rs. 500 notes, which are worthless now.

Rs. 65,250 crore worth of black money was declared before September 30, 2016

So Rs. 500 and Rs. 1000 notes will not be accepted from Nov 9, 2016?

That’s right. You can’t use them to pay for goods or services. However, there are a few exceptions. For the first 72 hours after demonitization i.e. till midnight Nov 11, 2016, Rs. 500 and Rs. 1000 notes will continue to be accepted at the following locations:

  • Government hospitals and pharmacies, only for medical expenses
  • Railway ticketing counters, Government bus ticketing counters and airline ticketing counters, only for purchase of tickets
  • Petrol, diesel and CNG gas stations, authorized by public sector oil companies
  • Consumer cooperative stores and milk booths authorized by state or central governments
Invalidated notes will accepted at railway ticket counters for 72 hours

What do I do with the Rs. 500 and Rs. 1000 notes I have? Should I just burn them?

No, hold on! Not just yet. These notes can be exchanged at banks and head post offices and sub post office by Dec 30, 2016, by providing a valid identity proof such as Aadhaar, PAN card or voter ID card.

What about notes and coins of other denominations?

All other denominations of notes and coins of Rs. 100 and below are still valid. Apart from this, new notes of denominations Rs. 500 and Rs. 2000 will be issued in exchange for the old notes.

Anything else I need to know?

  • Non cash payments cheque, demand drafts, credit and debit cards, net banking, wallets etc. are not affected in any way.
  • For the first few days, withdrawals from ATMs will be restricted to Rs. 2000 per day, due to limited supply of notes of newer denominations.
Prepare for long queues at ATMs for the first few weeks

Watch Prime Minister Narendra Modi’s address to the nation to learn more:

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Founder, Jovian

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Aakash N S

Aakash N S

Founder, Jovian

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