Demonetisation 30 days: A timeline of PM Narendra Modi's grand Indian currency show
The Narendra Modi-government and opposition parties are still fighting in Parliament over the merits and demerits of the note ban.
On 8 November, Prime Minister Narendra Modi announced the biggest-ever demonetisation exercise India has ever seen by abruptly withdrawing Rs 500 and Rs 1,000 notes from public use in a bid to clamp down on black money, fake currency menace, terror funding and corruption. The PM said there are certain exemptions for the first 72 hours, including permission to use old currency in government hospitals, for buying fuel, medicines, train tickets, airline tickets, in government buses and for paying utility bills. Exchange of notes were initially allowed up to Rs 4,000 while cash withdrawal at ATMs was capped at Rs 2,000 per card per day and withdrawal at banks were allowed with a limit of Rs 10,000 per day and Rs 20,000 per week. Since then, rules have changed many times.
After a month of demonetisation, the country is still reeling under the cash crunch as banks branches and ATMs are still struggling to meet the cash demand from common people. The demonetisation-resulted cash crunch has hit the economy hard, especially in the rural areas. The Narendra Modi-government and opposition parties are still fighting in Parliament over the merits and demerits of the note ban. The stated long-term gains are still unclear, while the immediate challenge for the government is to ensure cash shortage eases in the minimum time.
Here is a timeline of how the days have passed in the last one month of the note ban:
9 Nov: Banks and ATMs remained closed for the public on the first day of demonetisation
The BSE Sensex ended the day about 339 points lower
The rupee plummeted 19 paise to 66.43 against the US dollar
Govt announced deposits above Rs 2.5 lakh to face tax, penalty on mismatch
Govt suspended highway toll till November 11 midnight
Major banks extended working hours till 8 pm; waived ATM charges.
10 Nov: Long queues to exchange and deposit annulled notes witnessed at banks across India which opened for public while ATMs continued to remain shut
Bank stocks surged up to 12 percent as analysts speculated that banking sector is expected to benefit when more money flows into the formal sector.
11 Nov: ATMs open for the first time after demonetisation announcement. But, after opening, most ATMs went dry in a few hours with people drawing the maximum possible amount; long queues beginning to see across the country
RBI assures public that enough currency is available with banks for exchange
Govt extends exemptions for using old Rs 500 and Rs 1,000 notes till 14 November midnight
Toll waiver on national highways extended till 14 November midnight by the govt.
12 Nov: PM Modi hints at more steps to unearth black money.
Week-end rush adds to woes; anger, impatience at banks; ATMs ran dry on cash.
13 Nov: Queues gets longer at banks, ATMs Sunday sees no let up in rush; long queues continue outside banks, ATMs
For the second time in a week, RBI assures public that there is no need to be anxious and enough cash is available with banks. But that assurance isn't reflecting on the ground
Exchanged limit increased from Rs 4,000 to Rs 4,500
ATM withdrawal limit increased from Rs 2,000 to Rs 2,500
To augment cash supplies, newly printed hard-to-fake Rs 500 notes were released in market
The weekly limit of Rs 20,000 for withdrawal from bank counters has been increased to Rs 24,000. The maximum limit of Rs 10,000 per day on such withdrawals has been removed.
14 Nov: Government extended acceptance of Rs 500 and Rs 1,000 notes for public utility and fuel payment till 24 November
Banks were closed on account of Guru Nanak Jayanti; queues gets longer at ATMs
Cash withdrawal for current account holders increased to Rs 50,000 per week
Note ban has led to 'financial chaos', said bank unions
Charges on ATM transactions waived till 30 Dec
Cash crunch continued; Parliament House ATMs too ran dry.
15 Nov: No respite from long queues at banks, ATMs
Government asks banks to put indelible ink on the right hand finger of those exchanging banned 500 and 1,000 rupee notes
SC refused to stay Centre's move to demonetise currency notes.
16 Nov: Chaos continue at banks; most ATMs ran out of cash
SBI collected Rs 1,14,139-crore in deposits in last 7 days.
17 Nov: Government lowers the exchange limit for now-defunct 500 and 1,000 rupee notes to Rs 2,000 from the existing cap of Rs 4,500
Cash withdrawal of Rs 2.5 lakh from bank account were allowed for wedding ceremonies
Government eases cash withdrawal limit for farmers by allowing them to withdraw up to Rs 50,000 cash per week from bank.
Don't hoard currency, sufficient notes in supply, RBI tells public
Govt extended toll exemption on National Highways till November 24 midnight.
Select petrol pumps allowed to dispense cash up to Rs 2,000 through debit card swipe.
Some banks cut fixed deposit rates up to 1 percent.
18 Nov: No respite from queues, chaos; ATMs still fight cash shortage.
Demonetisation to lower GDP growth by 0.3-0.5 percent, CARE Ratings says.
Congress party alleges 55 died due to demonetisation, seeks PM's apology
Proceedings in Parliament were washed out for the second consecutive day.
19 Nov: Queues got shorter at banks; long wait at ATMs continued.
20 Nov: With banks closed on Sunday, longer queues at ATMs
21 Nov: Farmers allowed to use old Rs 500 notes for buying seeds
Bank received Rs 5.12 lakh crore of deposits and exchanged Rs 33,006 crore, RBI said in a release
Demonetisation effect: GDP to fall by up to 80 bps, said DBS Bank.
22 Nov: 82,500 ATMs out of 2.2 lakh ATMs recalibrated to dispense new notes
Some relief for cash-starved public, queues shortened as about 40 percent of total ATMs have started dispensing new Rs 500 and Rs 2,000 notes.
RBI doubles Prepaid Payment Instruments limit to Rs 20,000.
23 Nov: Goldman forecasts deceleration in GDP growth to 6.8 percent in FY17
Rs 1.20 lakh crore deposited in SBI.
24 Nov: Government extends toll exemption on NHs till 2 Dec mid-night
Notes ban to significantly disrupt economic activity, Moody's said in a release
Government withdraws exchange facility of old currency notes and extends deadline for exemptions of using old Rs 500 notes up to 15 December midnight
Queues get shorter at bank branches but continues at ATMs.
25 Nov: RBI says the facility to exchange old Rs 500 and Rs 1,000 notes will continue to be available at its counters
India growth to slow to 6.5 percent on notes ban, Deutsche Bank said
Demonetisation to slow down personal computers, phone sales in Q4, according to research firm IDC
Notes ban to have negative impact on growth in short run, Fitch says
Queues at banks thin, but some branches still faces cash pain.
26 Nov: Deposits in Jan Dhan accounts soars sharply by around Rs 27,200 crore to Rs 72,834.72 crore in just 14 days after the announcement of ban on old Rs 500 and Rs 1,000 currency notes
27 Nov: Rs 32,631 cr deposited in post offices since demonetization
28 Nov: Banks get about Rs 8.45 lakh crore worth of scrapped notes, RBI says
After 3 weeks, queues at banks, ATMs shrinks but cash crunch remained.
29 Nov: Queues outside ATMs eases, but customers throng banks
RBI relaxes withdrawal norms, nudges retailers to deposit cash.
30 Nov: RBI limits withdrawal from Jan Dhan accounts to Rs 10,000 a month
Queues at ATMs, banks grow shorter but wait for cash continues.
1 Dec: Government says that old Rs 500 notes are valid till 2 Dec for fuel, air ticket purchase instead of 15 December announced earlier.
Demonetisation takes a toll on manufacturing sector growth in November, according to PMI survey.
BofA cuts FY17 growth forecast to 6.9 percent amid demonetisation
Pay day rush: Banks resort to rationing of cash in order to handle the huge pay day rush at branches
1.80 lakh ATMs re-calibrated to dispense Rs 500, 2,000 notes
Cash shortage may slow down GDP to 6.5 percent in Oct-Dec quarter, Nomura says.
2 Dec: India Ratings lowers GDP forecast to 6.8 percent post demonetization.
3 Dec: Queues for cash on, toll collection resumes.
6 Dec: Tax dept seizes Rs 130 crore cash, jewellery and Rs 2,000 crore of undisclosed wealth has been admitted by taxpayers post demonetisation
7 Dec: RBI defends note ban and plays down its impact on economy. Demonetisation was not done in haste, says RBI Governor during the monetary policy presser
Note ban impact on GDP growth only 15 bps, says RBI
Rs 11.55 lakh crore or 76 percent of junked notes have come back into the system, RBI said.
Dr Reddy's was the top gainer in the Sensex pack, followed by ONGC, HDFC, IndusInd Bank, ICICI Bank, Sun Pharma and Kotak Bank
RBI Governor Shaktikanta Das said food and fuel inflation have pushed core inflation, adding that the expected normal monsoon forecast should ease the prevalent condition
Sankar, a career Central banker, has worked in various positions at the Reserve Bank of India. He has a Master of Philosophy in Economics from the Jawaharlal Nehru University