Two of India’s largest denomination banknotes were scrapped on Wednesday. The five hundred rupee and 1,000 rupee notes can no longer be accepted by businesses across the country. Indians will be allowed to deposit or exchange their old currency notes at banks and post offices until the end of the year.
Reserve Bank of India (RBI) data suggests that the two denominations= account for 86 per cent of the value of all cash in circulation in India at present. “Imagine if in 24 hrs the $20 and $10 bills had no value and you had to exchange at a bank,” tweeted Andreas Antonopoulos. “That just happened to a billion people in India.”
The drastic change is designed to fight corruption and black markets, said Prime Minister Narendra Modi in an unscheduled television announcement on Tuesday night. The effort, although unexpected, was Modi’s way of fulfilling an election promise to curb tax evasion.
The target of this currency swap-out scheme is the shadow economy, also known as the informal sector, the informal economy, System D, the grey economy, and often confused with the black market. The Hindu reported that 75 percent of India was employed by the shadow