India to eliminate largest banknotes in strike at corruption
Suddenly President of India announces these 500, 1000 rupee banknote can't use anymore.
It is very scared things...
I have these 4 seats. No problem, I can use anyway !!
Nathan Bomey , USA TODAY
India plans to eliminate the current versions of its two largest banknotes in a bid to undermine pervasive corruption.
Prime Minister Narendra Modi announced Tuesdaythat current 500- and 1,000-rupee notes — worth about $7.50 and $15, respectively — will be taken out of circulation at midnight. They will no longer be acceptable currency, with the exception of payment for certain essential items such as milk, travel and medical costs for the next 72 hours.
The move comes as the country grapples with what Modi called "the specter of corruption and black money," which he said has fueled poverty, aided terrorists and contributed to inflation.
India ranked fourth on the nonprofit watchdog group Global Financial Integrity's list of developing countries with the highest "illicit financial flows" from 2004-13, averaging $51 billion annually.
"It has been a matter of concern for all of us that corruption and black money tend to be accepted as part of life," Modi said in a televised address. "This type of thinking has afflicted our politics, our administration and our society like an infestation of termites. None of our public institutions is free from these termites."
Dev Kar, chief economist of Global Financial Integrity, said the new policy may prompt criminals to use other currencies for their illicit transactions.
"Nevertheless, the sudden cancellation of high denomination notes will throw a monkey wrench into the operations of black marketeers until they adjust to a 'new normal," Kar said in an email. "Meanwhile, they will be quite inconvenienced to settle large illegal transactions in rupees."
Concerns about corruption connected to large banknotes are not unique to India. In fact, some activists favor eliminating the American $100 bill, which is often abused by international criminals.
Harvard's Peter Sands recently delivered a highly publicized study recommending the elimination of the $100 bill, the 500-euro bill and other large banknotes.
They are the "preferred payment mechanism of those pursuing illicit activities, given the anonymity and lack of transaction record they offer, and the relative ease with which they can be transported and moved," Sands concluded.
India will issue new versions of the 500-rupee bill and a new 2,000-rupee bill as replacements. Other notes, including the 1-, 2-, 5-, 10-, 20-, 50- and 100-rupee notes, will not be affected.
Anyone holding the current 500- and 1,000-rupee bills will be allowed to deposit them in financial institutions from Nov. 10 through Dec. 30. The country said it would allow foreign tourists to exchange up to 5,000 rupees into legal tender.
