The concept of Notebandi
On 8th November 2016, the Prime Minister of India, Mr. Narendra Modi announced that the currency notes in the denomination of 500 and 1,000 will have no value of a legal tender.
This news was announced by the Prime Minister himself on the evening of 8th November 2016, and it was also mentioned that the demonetisation will be adopted from the mid night that is from 12 am of 9th November, 2016 itself.
In his speech, the Prime Minister directly addressed to the ‘Aam Janta’ of the nation that the 500 and 1,000-rupee notes will remain just a mere piece of paper (kagaz ke tukde) from the midnight of 8th November.
He also said that the 500 and 1,000-rupee notes should be returned to the nearest bank in which one has an account and also post offices to exchange them with new currency notes of 500 and 2000 rupees.
The Prime Minister, in his speech, mentioned about all the increasing problems about the Corruption and the counterfeit currency which also led in devaluation of the Indian Rupee.
Therefore, to reduce this kind of degradation of the currency, demonetisation of the 500 and 1,000-rupee notes was implemented.
The New Currency Note
The 2,000-rupee note was introduced for the first time in Indian Currency system. The new currency notes had new security features which were different from the old ones.
These security features also included new additions to them in order to make it difficult for the currency notes to be forged by the counterfeit currency producers.
Also, the new notes did not resemble the old currency notes in any way. The new currency notes are smaller in their length and are different in colour along with a lot of very minute changes.
This was probably done purposely to bring in a change in the currency system as well as to introduce new security features which are difficult to forge as the main motive of notebandi was to eradicate the black money.
How was the money returned back to the government?
There were certain rules as to how the old notes should be returned to the bank and how should one carry on with their daily transaction without letting the demonetisation process affect them adversely.
It was also told that there was a limit on how much amount of money a person can exchange in one day, the limit being 4000 rupees daily.
It was also mentioned that the exchange of money will be possible only when a valid identity card like the Aadhaar, PAN or Election Card is produced at the time of exchange at the bank or post office.
There was a date set from 10th November to 24th November for the return and exchange of all the old currency notes with the new ones but later the date had extended in order to accommodate all the remaining depositions to be made by the people.
Also, the people were restricted to withdraw large amount of money from the ATM.
A maximum amount of 4000 rupees could be withdrawn from the ATM per day. Also, a person was allowed to withdraw Rs. 10,000 from his bank account per day and Rs. 20,000 in a week.
People reaction to Notebandi?
It was first considered as a joke or just a warning of demonetisation because of the increasing corruption and terrorist groups counterfeiting the Indian Currency which result in devaluation of the Indian Rupee.
Even the developed countries thought of it as a joke and a warning.
The common man of India just had a cloudy or vague idea about Notebandi/demonetisation of the 500 and 1,000-rupee notes and it was on the next day that a big cluster of confusion was formed among the citizens.
Even when all of this was explained by the Prime Minister himself, the common man could not digest this news as it was an unexpected, shocking and somewhat disturbing news to the citizens.
The news was disturbing because in India as there are many people (especially the poor people, housewives and older people) who trust their own locker system instead of the bank account to store their money.
And when the PM says that the currency will seize to have its value as a legal tender, it becomes a disturbance to the common people as to how to go and exchange such a huge of money which was stored in the locker (Tijori) at home.
This created a chaos among the people but when assured by the Prime Minister himself, the citizens supported the Prime Minister in this bold step of demonetisation to curb the increasing corruption.
Reason behind demonetisation
The reason for demonetising the 500 and 1,000-rupee currency notes was that these notes were circulated at a higher rate in the market as black money and are the highest denomination notes in the Currency System of India.
These notes were counterfeited on a very large scale and were circulated to almost all states of India. All this counterfeiting devalues the Indian Rupee among the International Economies.
Also, by demonetising the currency notes, people did not have cash to carry on with their regular transactions which included payment of bills or any medical care related payments.
So, the government also promoted the use of digital banking and finance system to make all the payments for all the bills also promoting certain private digital money transaction systems.
This in a way promoted digitalization in India as well as created awareness about the gravity of the situation due to the increasing Corruption in India.
This also helped in exposing all the people who had even a small amount of black money with them stored in the form of cash in their homes and offices.
As during the exchange of the currency notes, the record of all the transaction was mentioned.
This also brought forward a suspicion in those people who had larger amount of money with them with no such record of that transaction thus, concluding that it was black money.
Notebandi or demonetisation was a very bold step with very wide spreading effects on the Indian Economic growth and Development.
Many people were exposed along even if they had a small amount of black money as they did not have the record of the transactions.
Also, the counterfeit currency or fake currency was exposed along with their producers and locations thus, making this demonetisation successful to a certain extent.
Overall, Notebandi or demonetisation created a big chaos and a lot of exposures and also many controversies regarding the black money and corruption.
But ultimately in the end, it is true that the concept of Notebandi was on a very large scale and also had a great impact on the Indian citizen as a huge amount of black money as well as the fake notes were exposed.
This brought forward the fact that corruption and counterfeiting the Indian currency is at its highest in India and is devaluating the Indian Rupee.
Feature Image Credit: Pixabay