Govt Demonetises Rs 500, Rs 1000 Currency Notes

* PM’s address takes nation by surprise

* Major assault on black money, fake currency, corruption.

* Rs 500, Rs 1000 notes become mere pieces of paper

Taking the nation by surprise, Prime Minister Narendra Modi on Tuesday night announced demonetisation of Rs 1000 and Rs 500 notes with effect from midnight, making these notes invalid in a major assault on black money, fake currency and corruption.

In his first televised address to the nation, Modi said people holding notes of Rs 500 and Rs 1000 can deposit the same in their bank and post office accounts from November 10 till December 30.

In a sudden address to the nation, Prime Minister 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.

In his 40-minute address, first in Hindi and later in English, the Prime Minister said all notes in lower denomination of Rs 100, Rs 50, Rs 20, Rs 10, Rs 5, Rs 2 and Re 1 and all coins will continue to be valid. He also announced that new notes of Rs 2000 and Rs 500 will be introduced. ATM withdrawals will be restricted to Rs 2000 per day and withdrawals from bank accounts will be limited to Rs 10,000 a day and Rs 20,000 a week.

He also expressed confidence that political parties, workers, social organisations and the media will go further than the government in making it a success.

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.