The new policy switching to the new notes suddenly made millions of Indian people queue at banks to change money yesterday. Earlier on November 8, the Indian Prime Minister, Narendra Modi, suddenly announced a measure to ban the old banknotes 1,000 and 500 rupees. So why is there such an event in India?
A measures to fight the “black money” leads to Indian banks chaos
Indian Prime Minister, Narendra Modi, has suddenly announced that the banknotes of 500 and 1,000 rupees of this country are no longer legally valid. This decision has been official since 12AM on November 9. This movement is to fight the corruption and tax evasion in India. These two kind of banknotes account for about 80% of the national banknotes in this Asian country, equivalent to 23 billion rupees.
The Indians still have more than one month from now till December 30 to deposit or exchange the notes before all of them at the bank or post office become worthless. The Minister of Finance, Arun Jaitley told people not to have to rush in this early days because they still had a lot of time. On the other hand, some banks ran out of cash. Some others had to ask the police to control the flow of people waiting in long queues outside the banks, which made Indian brand chaos around India, especially in Delhi.
Most of the banks had to close on Wednesday to import the new banknotes. The amount of cash withdrawn from ATMs is also limited. This surprising policy from government is aimed at corrupt officer. However, many people with low incomes, small businesses and normal citizens having saving money have been badly hit.
How many “black money” is in circulation?
We do not know the true amount of black money in circulation, but reporters said the matter “black money”. The money earned through corruption or tax is a problem. The Indian government hopes to excrete those for tax evasion and tax amounts. There are rumors that state agencies is urgently conducting tax examination in many regions across India.