India's Prime Minister Narendra Modi shocked the country on November 8 by abolishing 500 and 1,000 rupee notes, which accounted for 86 percent of the cash in circulation. The move was aimed at cracking down on the shadow economy, but has brought India'scash economy to a virtual standstill
The new notes of Rs 500 and Rs 1000 denomination. Pic/AFP
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India's Prime Minister Narendra Modi shocked the country on November 8 by abolishing 500 and 1,000 rupee notes, which accounted for 86 percent of the cash in circulation. The move was aimed at cracking down on the shadow economy, but has brought India's
cash economy to a virtual standstill.
The government and the Reserve Bank of India have since taken a slew of measures to ease the pain from its measures. They are detailed below in chronological order.
November 8
- India abolishes 500, 1,000 rupee notes in fight against 'black money'
- 500, 1000 rupee notes must be tendered into banks, RBI by Dec. 30
- Caps exchange of old bills over-the-counter at banks at 4,000 rupees
- Caps cash withdrawals from bank accounts at 10,000 rupees per day till Nov 24
- Caps cash withdrawals from bank accounts at 20,000 rupees per week till Nov 24
- Caps cash withdrawals from ATMs at 2,000 rupees per day per card till Nov. 18
- Caps cash withdrawals from ATMs at 4,000 rupees per day per card from Nov. 19
- Allows certain payments in old notes including for petrol for limited time
November 11
- Extends deadline for payments in old notes including for petrol for limited time
November 13
- RBI raises cap on weekly cash withdrawals from banks to 24,000 rupees from 20,000
- Removes per-day withdrawal limit cap of 10,000 rupees
- Raises limit for over-the-counter exchange of old bills at banks to 4,500 rupees from 4,000
- Waives ATM fees for all transactions by savings bank customers til Dec. 30
- Govt increases withdrawal limits at recalibrated ATMs to 2,500 rupees/day from 2,000 rupees
November 14
- Extends deadline for payments in old notes including for petrol for limited time
November 15
- Govt says banks must use indelible ink to ensure people change cash only once
November 17
- Govt allows farmers to withdraw up to 25,000 rupees a week against the crop loans
- Govt extends time limit for farmer to pay crop insurance premiums by 14 days
- Cuts limit for over-the-counter exchange of old bills at banks to 2,000 rupees from 4,500
November 18
- RBI sets limit of cash withdrawal at card swiping machines at 2,000 rupees per day
November 21
- RBI allows cash withdrawal of up to 250,000 rupees for wedding-related expenses
- RBI allows farmers to withdraw up to 25,000 rupees a week from their loan, deposit accounts
- RBI gives small borrowers 60 more days before loans of up to 10 mln INR are marked substandard
- Govt allows farmers to purchase seeds from state-run outlets with old 500 rupee notes
November 22
- RBI sets balance kept in prepaid wallets, cards (PPIs) at 20,000 rupees from 10,000 til Dec 30
- Merchants can transfer up to 50,000 rupees from PPIs to banks til Dec 30
- Monthly limits on transactions via PPIs raised to 20,000 rupees for 10,000 til Dec 30
- RBI asks state-run Nabard to disburse up to 230 bln rupees for crop loans
November 23
- India government says will offer 210 billion rupees in farm credit to farmers
November 24
- Government stops over the counter exchange of old banknotes; can only be deposited
- Government to ensure adequate cash supply for pensioners, armed forces personnel
- Allows certain payments in old 500 rupees notes including at tolls, hospitals for limited time
November 25
- RBI expands basket of securities that can be accepted for collateral under money market ops
- RBI says old currency notes can be exchanged at RBI branches
- RBI says tourists can exchange foreign currency worth up to INR 5,000 per week till Dec 15
November 26
- RBI says banks need to temporarily transfer deposits between September. 16 and Nov. 11 under CRR.
November 28
- Govt announces tax amnesty scheme for unreported cash; will charge 50 pct in taxes, surcharges
- People would also have to park quarter of total sum in non-interest bearing deposit for 4 yrs
- RBI to allow withdrawals above 24,000 INR weekly limit of deposits made in legal tender.
- Those withdrawals would be in new 2,000, 500 rupee bills
November 30
- RBI allows banks to use all cash to meet hiked cash reserve requirement ratio
- RBI tightens monthly withdrawal rules from "Jan Dhan" accounts for poor
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