Government of India on 8th November 2016 declared to the people that the existing Rs. 500 and Rs. 1000 will not be a legal tender for transactions. The news came when the Prime Minister of India Shri. Narendra Modi made the announcement in a surprise television address.
In the place of old currency notes new Rs. 500 and Rs. 2000 will be in circulation in the banks and in the ATMs. The currency of remaining denomination will be available as usual in the country.
Why was this step taken by the Reserve Bank of India for the nation?
The demonetization will bring new changes among the people of India by reducing the effect of funding foreign terrorist activities against India, minimize the level of bribery, and bring down the presence of black money in the hands of the social countrymen.
The move is a great one as the total currency in circulation amounts to 16.42 lakh crores whereas only Rs. 500 and Rs. 1000 amount to around 14.18 lakh crores. So the effect is a big boon to the nation.
To regulate the effect of immediate changes petrol bunks, government hospitals, railways, airlines and some other government recognized organisations will still accept the use of old currency bank notes till 24th November 2016.
The Finance Minister of India Arun Jaitley has informed that this movement will bring in better economic and social system, increase the size of economy and the revenue potential of the country.
The positive effects of this movement have brought out the following impact in the society for the common man:
- People are standing in long queue to collect cash from the ATMs.
- People are gathering in the banks to exchange their old currency notes.
- For people holding unaccounted money have brought about the following impact:
- Making gold purchases from the jewelry.
- People started donating money to social and charitable organizations
- Bank customers have distributed their money through multiple bank transactions.
- Black money is dumped to get rid of the same.
It is a well appreciated norm taken by the Government of India to help improve the currency circulation in the social hands of honest people of the country. However it will take a few months to get things stabilized in the social network and make things operate as normal.