In a surprise announcement on Tuesday, Prime Minister Narendra Modi said Rs 500 and Rs 1000 currency notes would be scrapped starting midnight.
Instead, the government will issue new Rs 500 and Rs 2000 notes.
But, do not panic!
Here are things you can do with the old money notes that you have:
# Deposit old notes of Rs 500 or Rs 1000 in banks or post office accounts from November 10 till December 30, 2016 without any limit. There will be a limit on withdrawal of Rs 10,000 per day and Rs 20,000 per week. This limit will be increased in the coming days.
# Exchange old notes of Rs 500 or Rs 1000 at any bank, head post office or sub-post office. Compulsory ID proof is required for this transaction. The limit for this will be Rs 4000 upto November 24.
# No restriction of any kind on non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.
# On November 9 and in some places on November 10 also, ATMs will not work. In the first few days, there will be a limit of Rs 2000 per day per card. This will be raised to Rs 4000 later.
The sudden move to demonetise Rs 500 and Rs 1,000 currency notes is not new. Rs 1,000 and higher denomination notes were first demonetised in January 1946 and again in 1978.
The highest denomination note ever printed by the Reserve Bank of India was the Rs 10,000 note in 1938 and again in 1954. But these notes were demonetised in January 1946 and again in January 1978, according to RBI data.
Rs 1,000 and Rs 10,000 bank notes were in circulation prior to January 1946. Higher denomination banknotes of Rs 1,000, Rs 5,000 and Rs 10,000 were reintroduced in 1954 and all of them were demonetised in January 1978. The Rs 1,000 note made a comeback in November 2000. Rs 500 note came into circulation in October 1987. The move was then justified as attempt to contain the volume of banknotes in circulation due to inflation.
However, this is the first time that Rs 2,000 currency note is being introduced.
While announcing currently circulated Rs 500 and Rs 1,000 notes as invalid from midnight on Tuesday night, Prime Minister Narendra Modi said new Rs 500 note and a Rs 2,000 denomination banknote will be introduced from November 10.
Bank notes in Ashoka Pillar watermark series in Rs 10 denomination were issued between 1967 and 1992, Rs 20 in 1972 and 1975, Rs 50 in 1975 and 1981 and Rs 100 between 1967-1979. The banknotes issued during this period contained the symbols representing science and technology, progress and orientation to Indian art forms.
In the year 1980, the legend Satyameva Jayate — ‘truth alone shall prevail’ — was incorporated under the national emblem for the first time. In October 1987, Rs 500 banknote was introduced with the portrait of Mahatma Gandhi and Ashoka Pillar watermark.
Mahatma Gandhi (MG) series banknotes – 1996 were issued in the denominations of Rs 5, (introduced in November 2001), Rs 10 (June 1996), Rs 20 (August 2001), Rs 50 (March 1997), Rs 100 (June 1996), Rs 500 (October 1997) and Rs 1,000 (November 2000).
The Mahatma Gandhi Series – 2005 bank notes were issued in the denomination of Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 and Rs 1,000 and contained some additional/new security features as compared to the 1996 MG series. The Rs 50 and Rs 100 banknotes were issued in August 2005, followed by Rs 500 and Rs 1,000 denominations in October 2005 and Rs 10 and Rs 20 in April 2006 and August 2006, respectively.