India has decided to discontinue its two largest rupee notes in order to stop corruption.
The 500 and 1,000 rupee notes will no longer be valid currency as of midnight local time Nov. 8, Prime Minister Narendra Modi said in a surprise announcement, according to CNN Money.
Modi said the decision is aimed at fighting against corruption and money laundering, referring to them as “diseases” and obstructing India’s economic success.
“Black money and corruption are the biggest obstacles in eradicating poverty,” he said, according to BBC News.
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Indians will have 50 days to deposit or exchange the notes at banks or post offices, and hospitals, airports, and railway stations will be allowed to accept them as payment for an additional three days until November 11.
A 500 rupee note is worth roughly $7.50, and a 1,000 note just over $15.00. By doing away with both notes, the 100 rupee will be the largest note currently available, which is worth $1.50.
A new 500 and 2,000 rupee note will be issued as replacements, BBC News reports.
The move to change the currency comes after the country completed a four-month amnesty for citizens with previously undisclosed income, CNN Money reports. More than $9.8 billion was reported by Indians during the amnesty period, but according to a state audit report, the government failed to collect over $105 billion in taxes in 2014-2015. What's more, 96 percent of the unclaimed amount was labeled “difficult to recover.”
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According to government officials and international research groups, Indians have more than $500 billion stashed away overseas that the government may not be able to collect tax on. And due to the informal sector of India’s economy, only 2 percent of Indians pay any income tax.
Modi said that the Reserve Bank of India is working on getting the new 500 and 2,000 rupee bills printed, but did not provide a date for when they would be ready for distribution, according to CNN Money.
In addition to fighting corruption and money laundering, Modi said changing the currency is an anti-terrorism measure.
“Enemies across the border have run their operations using fake currency notes,” he said, referring to neighboring Pakistan.