Taking the nation by surprise, on Tuesday, Prime Minister Narendra Modi announced demonetisation of Rs 1,000 and Rs 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption.
In his first televised address to the nation, Modi said people holding notes of Rs 500 and Rs 1,000 can deposit the same in their bank and post office accounts from 10 November till 30 December.
In his 40-minute address, PM said the notes of Rs 500 and Rs 1000 "will not be legal tender from midnight tonight" and these will be "just worthless piece of paper."
PM Modi announced, ATM withdrawals will be restricted to Rs 2,000 per day in the initial days and this limit will be raised to Rs 4,000 later. Withdrawals from bank accounts will be limited to Rs 10,000 a day and Rs 20,000 a week.
Banks will remain closed on Wednesday and some ATMs will also not function on Wednesday and Thursday as RBI stocks banks and ATM machines with lower denomination notes.
This means that the public will have to visit ATMs which supply currency with lower denomination before Wednesday morning. Online transactions are unaffected as there are no restrictions of any kind on non-cash payments by cheques, demand drafts, debit or credit cards and electronic fund transfer.
Public can exchange their Rs 500 and Rs 1,000 notes with lower denomination currency notes at designated banks and post offices on production of valid government identity cards like PAN, Aadhaar and Election Card from 10 November to 24 November with a daily limit of Rs 4,000.
Those unable to deposit Rs 1,000 and Rs 500 notes till 30 December this year can do so in designated RBI offices till 31 March next year after filling a declaration form along with proof and reasons.
Rs 500 and Rs 1000 notes will be valid for transactions related to booking of air tickets, railway bookings, government bus ticket counters and hospitals till the midnight of 11 and 12 November.
With inputs from agencies