The Reserve Bank of India has banned the use of 2000 rupee notes.
India’s central bank has banned the use of all 2,000 rupee notes, worth around £22 each. The Reserve Bank of India (RBI) has made it illegal to keep or exchange the note after midnight on November 8th. The announcement comes as part of a crackdown on corruption and tax evasion. The ban also applies to 500 rupee notes, which are worth around £6.
The decision means that anyone holding 2,000 rupee notes will have to deposit them at banks before midnight or risk being fined. The government estimates that almost 90% of India’s currency is in circulation outside the country and will be removed from circulation by this move.
Why are 2,000 rupee notes banned?
Prime Minister Narendra Modi said that the move was aimed at tackling corruption and tax evasion. It is hoped that removing so much cash from circulation will reduce crime rates and increase tax revenue for the government.
What does this mean for India?
Although there is a two-week window for people to exchange their old currency for new ones, it is expected to cause chaos across the country as people scramble to find alternative ways to store their money.
What does this mean for you?
- If you have any old 2,000 rupee notes left over from your travels in India then you should try and exchange them as soon as possible because they will become worthless after November 8th.
- Those who don’t manage to exchange their money before midnight on November 8th could face a fine if they are caught with old banknotes
- If you have Indian friends or family then make sure you send them your contact details so they can get in touch with you before November 8th if they need anything.
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