Prime Minister Narendra Modi, in a sudden address to the nation on Tuesday, announced that Rs 500 and Rs 1,000 denomination notes are being withdrawn from midnight. He said that such notes will become "mere paper".
Modi said this was being done to tackle the menace of black money in the country, which has sapped the economy. He also said that ATM withdrawals will be restricted to Rs 2,000 per day till November 11, when this limit may be increased slowly.
The RBI will soon introduce new Rs 500 and Rs 2,000 notes with a new design.
RBI announced that the notes will be introduced from November 10 and will be smaller than the present notes. The Rs 500 notes will be called the Mahatma Gandhi series. The Rs 2,000 notes will have pictures of Mahatma Gandhi and Mangalyaan on it.
"Based on past experience RBI will limit total currency circulation in high denominations," said the PM.
The Prime Minister said that the Rs 500 and Rs 1,000 denomination notes can be deposited in banks and post offices, and also exchanged across the bank counter by showing government-issued ID proof.
Withdrawals from bank accounts will be limited to Rs 10,000 for the first few days.
Banks have also been ordered to remain shut on Wednesday, he said. Modi said that for medical patients, the old notes will be accepted.
He also said that retail petrol pumps will accept such notes till November 11, after which the stations will have to keep a register of such notes for some time. The decisions come after a cabinet meeting.
What you can do with your Rs 500 and Rs 1000 currency notes:
Change them at the bank or post office between November 10 and December 30.
Carry your Aadhaar card and pan card when you go to exhange notes.
You can exchange these notes at Reserve Bank after December 30.
The picture of the new Rs 2000 note.