A store displaying the demonetisation message: "Withdrawal of legal tender statu

s for ?500 and ?1000 notes", at the cash counter

The demonetisation of ?500 and ?1,000 banknotes was a policy enacted by the Gove
rnment of India on 8 November 2016. All ?500 (US$7.40) and ?1,000 (US$15) bankno
tes of the Mahatma Gandhi Series ceased to be legal tender in India from 9 Novem
ber 2016.[1]
The announcement was made by the Prime Minister of India Narendra Modi in an uns
cheduled live televised address at 20:15 Indian Standard Time (IST) on 8 Novembe
r.[2][3] In the announcement, Modi declared that use of all ?500 and ?1,000 bank
notes of the Mahatma Gandhi Series would be invalid from midnight of the same da
y and announced the issuance of new ?500 and ?2,000 banknotes of the Mahatma Gan
dhi New Series in exchange for the old banknotes. However, the banknote denomina
tions of ?100, ?50, ?20, ?10 and ?5 of the Mahatma Gandhi Series remained legal
tender and were unaffected by the policy.
The government claimed that the demonetisation was an effort to stop counterfeit
ing of the current banknotes allegedly used for funding terrorism, as well as a
crack down on black money in the country.[4][5] The move was described as an eff
ort to reduce corruption, the use of drugs, and smuggling.[6][7] However, in the
days following the demonetisation, banks and ATMs across the country faced seve
re cash shortages.[8][9] The cash shortages had detrimental effects on a number
of small businesses, agriculture, and transportation, while people seeking to ex
change their notes had lengthy waits, and several deaths were linked to the rush
to exchange cash.[10][11] Also, following Modi's announcement, the BSE SENSEX a
nd NIFTY 50 stock indices crashed for the next two days.[12]
The demonetisation received support from several bankers as well as from some in
ternational commentators, although it was criticised by members of the oppositio
n parties, which led to debates in both houses of parliament and triggered organ
ised protests against the current government in front of the parliament and else
where across India.[13][14][15]
Contents [hide]
1
Background
2
Televised address
3
Exchanging old notes
4
Alleged prior leakage of information
4.1
Allegations and claims
5
Reactions
5.1
Support
5.2
Criticism
5.3
Opposition
5.4
Strikes
6
Effects and aftermath
6.1
Cash rush
6.2
Stock market crash
6.3
Transportation halts
6.4
Agriculture
6.5
Banking
6.6
Business
6.7
Municipal and local tax payments
6.8
Income tax raids and cash seizures
6.9
Insurgent groups
6.10
Railways
7
Evasion attempts
7.1
Gold purchases
7.2
Donations
7.3
Multiple bank transactions
7.4
Railway bookings

8
See also
9
References
10
External links
Background
There were instances of banknote demonetisations by the previous governments. In
January 1946, banknotes of 1,000 and 10,000 rupees were withdrawn and new notes
of 1,000, 5,000 and 10,000 rupees were introduced in 1954. The Janata Party coa
lition government had again demonetised banknotes of 1,000, 5,000 and 10,000 rup
ees on 16 January 1978 as a means to curb counterfeit money and black money.[16]
In 2012, the Central Board of Direct Taxes had recommended against demonetisatio
n, saying in a report that "demonetisation may not be a solution for tackling bl
ack money or economy, which is largely held in the form of benami properties, bu
llion and jewellery".[17][18] According to data from income tax probes, black mo
ney holders keep only 6% or less of their ill-gotten wealth as cash, hence targe
ting this cash may not be a successful strategy.[19]
On 28 October 2016 the total banknotes in circulation in India was ?17.77 trilli
on (US$260 billion). In terms of value, the annual report of Reserve Bank of Ind
ia (RBI) of 31 March 2016 stated that total bank notes in circulation valued to
?16.42 trillion (US$240 billion) of which nearly 86% (around ?14.18 trillion (US
$210 billion)) was ?500 and ?1,000 banknotes. In terms of volume, the report sta
ted that 24% (around 22.03 billion) of the total 90266 million banknotes were in
circulation.[20]
In the past, the Bharatiya Janata Party (BJP) had opposed demonetisation. BJP sp
okesperson Meenakshi Lekhi had said in 2014 that "The aam aurats and the aadmis
(general population), those who are illiterate and have no access to banking fac
ilities, will be the ones to be hit by such diversionary measures."[21][22][23][
24] On 8 May 2014, RuPay, domestic card system, was launched.[25] The Government
of India had launched Jan Dhan Yojana for financial inclusion of people having
no banking system in August 2014. The Government of India devised an Income Decl
aration Scheme (IDS), which opened on 1 June and ended on 30 September 2016. Und
er the scheme, the black money holders could come clean by declaring the assets,
paying the tax and penalty of 45% thereafter. The scheme yielded ?65,250 crore
from 64,275 declarations with 45% of it as the revenue to the government.[26] Th
e Unified Payments Interface was launched by National Payments Corporation of In
dia in April 2016 to encourage cashless payments.[27]
Televised address
On 8 November 2016, an announcement was made by the Prime Minister of India Nare
ndra Modi in an unscheduled live televised address to the nation at 20:15 IST.[2
][3] In the announcement, Modi declared circulation of all ?500 and ?1,000 bankn
otes of the Mahatma Gandhi Series as invalid effective from the midnight of the
same day, and announced the issuance of new ?500 and ?2,000 banknotes of the Mah
atma Gandhi New Series in exchange for the old banknotes.
After the official announcement by Prime Minister Modi, the Governor of the Rese
rve Bank of India, Urjit Patel, and Economic Affairs secretary, Shaktikanta Das
explained in a press conference that while the supply of notes of all denominati
ons had increased by 40% between 2011 and 2016, the ?500 and ?1,000 banknotes in
creased by 76% and 109% respectively in this period owing to forgery. This forge
d cash was then used to fund terrorist activities against India. As a result the
decision to eliminate the notes had been taken.[28]
Patel also informed that the decision had been made about six months ago, and th
e printing of new banknotes of denomination ?500 and ?2,000 had already started.
However, only the top members of the government, security agencies and the cent
ral bank were aware of the move. But media had reported in October 2016 about th
e introduction of ?2,000 denomination well before the official announcement by R

BI. This statement has led to much debate, because the Reserve Bank governor six
months before the announcement was Raghuram Rajan, while the new banknotes have
the signature of the newly appointed governor, Urjit Patel.[29][30]
Exchanging old notes
Ambox current red.svg
This section needs to be updated. Please update this article to reflect recent e
vents or newly available information. (November 2016)
People gathered at ATM of Axis Bank in Mehsana, Gujarat to withdraw cash followi
ng deposit of demonetised currency notes in bank on 15 November 2016.
The Reserve Bank of India laid down a detailed procedure for the exchange of the
demonetised banknotes with new ?500 and ?2,000 banknotes of the Mahatma Gandhi
New Series and ?100 banknotes of the preceding Mahatma Gandhi Series.[1] Followi
ng are the key points:
Long queue in front of SBI ATM at Paravur near the city of Kollam in Kerala, 19t
h November 2016.
Citizens will have until 30 December 2016 to tender their old banknotes at any o
ffice of the RBI or any bank branch and credit the value into their respective b
ank accounts.[1]
Cash withdrawals from bank accounts were restricted to ?10,000 per day and ?20,0
00 per week per account from 10 to 13 November 2016.[1] This limit was increased
to ?24,000 per week from 14 November.[31][32]
For immediate cash needs, the old banknotes can be exchanged for the new ?500 an
d ?2,000 banknotes as well as ?100 banknotes over the counter of bank branches b
y filling up a requisition form along with a valid ID proof.[1] This exchange is
restricted to once per person.
Initially, the limit was fixed at ?4,000 per person from 8 to 13 November 2016.
This limit was increased to ?4,500 per person from 14 to 17 November 2016.[31][3
2]
The limit was reduced to ?2,000 per person from 18 November 2016.[33]
Initially, all ATMs were dispensing banknotes of only ?50 and ?100 denominations
and cash withdrawals from ATMs were restricted to ?2000 per day.[34] From 14 No
vember onwards, ATMs recalibrated to dispense new ?500 and ?2000 notes will allo
w a maximum withdrawal of ?2,500 per day, while other ATMs dispensing banknotes
of only ?50 and ?100 denominations will allow a maximum withdrawal of ?2000 per
day.[31][32]
However, exceptions were given to petrol, CNG and gas stations, government hospi
tals, railway and airline booking counters, state-government recognised dairies
and ration stores, and crematoriums to accept the old ?500 and ?1,000 banknotes
until 11 November 2016, which was later extended to 14 November 2016 and once ag
ain to 24 November 2016.[35][36] International airports were also instructed to
facilitate an exchange of notes amounting to a total value of ?5,000 for foreign
tourists and out-bound passengers.[37]
Under the revised guidelines issued on 17 November 2016, families were allowed t
o withdraw ?250,000 for wedding expenses from one account provided it was KYC co
mpliant. The rules were also been changed for farmers who are permitted to withd
raw ?25,000 per week from their accounts against crop loan.[33][38]
Alleged prior leakage of information
Several exact details pertaining to the decision to demonetise the notes had bee
n published on 1 April 2016 in a Gujarati newspaper called Akila, including for
instance, that there would be around 2 months' time to exchange banned notes, an
d that new notes in the ?2,000 denomination would be issued.[39][40] The editor
of the newspaper claimed that it was only an April fools day prank.[41]
A fortnight before the official announcement, a news report in Hindi daily Daini

k Jagran quoting RBI sources mentioned about the coming release of new 2000 rupe
e note and alongside withdrawal of prevailing 500 and 1000 rupee notes when it i
s released.[42][43]
A businessman reportedly admitted in an interview, that he had received prior wa
rning of the impending demonetisation from a source in the government, and that
he had sufficient time to convert most of his money into smaller denominations.[
44]
The chairman of the State Bank of India had also openly spoken in April 2016 abo
ut the possibility of demonetisation of ?500 and ?1000 notes.[45]
A BJP MLA from Rajasthan, Bhawani Singh Rajawat, claimed in a video that 'Ambani
and Adani' were informed about the demonetisation, and made arrangements. Howev
er, he later said that it was an off-the-record conversation, and officially den
ied the comments.[46][47]
Allegations and claims
The Communist Party of India (Marxist) (CPI ( M)) alleged that the BJP unit in W
est Bengal had advance knowledge about the impending announcement, and deposited
money just before the announcement.[48][49] Aam Aadmi Party leader Arvind Kejri
wal also claimed that there had been some leakage regarding the move.[50][51] Ke
jriwal questioned how Sanjeev Kamboj, a BJP leader in Punjab, posted about the ?
2000 notes days before the official announcement, and alleged that a sudden spik
e in bank deposits between July and September 2016 was also due to information l
eakage.[52]
Reactions
Support
The decision met with mixed reactions Several bankers like Arundhati Bhattachary
a (Chairperson of State Bank of India), Chanda Kochhar (MD & CEO of ICICI Bank)
and Deepak Parekh (Chairman of HDFC) appreciated the move in the sense that it w
ould help curb black money.[53] Businessmen Anand Mahindra (Mahindra Group), Saj
jan Jindal (JSW Group), Kunal Bahl (Snapdeal and FreeCharge) also supported the
move adding that it would also accelerate e-commerce.[53] Infosys founder N. R.
Narayana Murthy praised the move.[54][55]
Finance Minister Arun Jaitley said that demonetisation would clean the complete
economic system, increase the size of economy and revenue base. He mentioned the
demonetisation along with the upcoming Goods and Services Tax (GST) as "an atte
mpt to change the spending habit and lifestyle."[56]
The Indian National Congress spokesperson Randeep Surjewala welcomed the move bu
t remained sceptical on the consequences that would follow.[57] Chief Minister o
f Bihar Nitish Kumar supported the move.[58][59][60] The demonetisation also got
support from Chief Minister of Andhra Pradesh Nara Chandrababu Naidu.[61][62][6
3] Former Chief Election Commissioner of India S. Y. Quraishi said demonetisatio
n could lead to long term electoral reforms.[64] Indian social activist Anna Haz
are hailed demonetisation as a revolutionary step.[65][66][67] The President of
India Pranab Mukherjee welcomed the demonetisation move by calling it bold step.
[68][69][70][71] The opinion of the masses varied both ways on micro-blogs and s
ocial media sites like Twitter.[72] In general, the move to demonetise and try t
o hinder black money was appreciated, but the manner in which it was carried out
by causing hardships to common people was criticised.[73]
By and large, international response was positive which saw the move as a bold c
rackdown on corruption.[74][75][76] International Monetary Fund (IMF) issued a s
tatement supporting Modi's efforts to fight corruption by the demonetisation pol
icy.[74]

Chinese state media Global Times praised the move and termed it as "fierce fight
against black money and corruption."[75] Former Prime Minister of Finland and V
ice-President of European Commission Jyrki Katainen welcomed the demonetisation
move stressing that bringing transparency will strengthen Indian economy.[77][78
] BBC's South Asia Correspondent Justin Rowlatt in his article praised the move
for its secrecy and success and elaborated on reason behind demonetisation.[79]T
im Worstall termed the demonetisation as welcome macroeconomic effect in his art
icle in Forbes magazine.[80] Swedish Minister of Enterprise Mikael Damberg suppo
rted the move by calling it bold decision.[76]
Singapore-based paper The Independent published a laudatory article on the move
titled "Modi does a Lee Kuan Yew to stamp out corruption in India." Lee Kuan Yew
was the Singaporean Prime Minister and is considered the architect of modern Si
ngapore. "From making up his mind to rolling it out, a new Lee Kuan Yew is born
in India. It will be reflected in the legacy of this Prime Minister," the articl
e said.[81]
Criticism
On 8 November 2016, Chief Minister of West Bengal Mamata Banerjee called the new
declaration "drama".[82] A Public Interest Litigation (PIL) was filed in Madras
High Court by M Seeni Ahamed, General Secretary of the Indian National League,
to scrap the decision. The High Court dismissed the PIL stating that it could no
t interfere in monetary policies of the government.[83] Similar PILs were also f
iled in the Supreme Court of India.[84] Supreme Court of India is yet to decide
on the matter. It is listed for hearing on 2nd December 2016. Former World Bank
Chief Economist, Kaushik Basu, said that the 'damage' is likely to be much great
er than any possible benefits.[85][86]
Prabhat Patnaik, a former professor of economics at the Jawaharlal Nehru Univers
ity, Delhi called the move 'witless' and 'anti-people'. He criticised the simple
way in which black money was assumed as "a hoard of cash", saying that it would
have little effect in eliminating "black activities" while "causing much hardsh
ip to common people."[87]
Opposition
A Congress-led opposition, which includes 13 political parties, opposed the curr
ent government on the demonetisation issue in the Winter Session of Parliament o
n 16 November 2016. The Chief Minister of West Bengal Mamata Banerjee also met t
he President Pranab Mukherjee to oppose the demonetisation.[88][89][90][91][92][
93] The debate on demonetisation is known to be initiated by Indian National Con
gress[94] and Anand Sharma in Rajya Sabha on 16 November 2016,[95][96] while Mam
ata Banerjee is known to be the first to oppose the current government on the de
monetisation.[97]
On 16 November 2016, Chief Minister of West Bengal Mamata Banerjee led a rainbow
delegation comprising political parties of Trinamool Congress, Aam Aadmi Party,
BJP ally Shiv Sena, Patidar Anamat Andolan Samiti (of Hardik Patel) and Nationa
l Conference to Rashtrapati Bhawan to protest against the decision to withdraw ?
500 and ?1000 banknotes. A memorandum was submitted to the President of India Pr
anab Mukherjee demanding rollback of the decision.[98] Outside the Parliament in
a rally the same day, Saugata Roy, a member of parliament from the opposition T
rinamool Congress Party, commented, "People are in utter distress, especially th
e informal sector is totally disrupted. Poor people, daily wage earners, they're
all facing difficulty"[10]
In the demonetisation debate on the first day of the Winter Session of Parliamen
t at the Rajya Sabha, on 16 November 2016, Pramod Tiwari from the Indian Nationa
l Congress, accused Narendra Modi for the demonetisation and compared Narendra M
odi to Mussolini, Hitler and Qadhafi, while Prem Chand Gupta questioned a statem
ent of Modi from the unscheduled TV broadcast on 8 November, "If it was planned

10 months ago, how did RBI Governor Urjit Patel sign on new note?". While on the
other side, Praful Patel criticised the demonetisation by stating "the governme
nt was not even prepared to recalibrate the ATMs while announcing the move. Peop
le's suffering unimaginable. Nobody is questioning the government's intention, b
ut you are unprepared to execute the move". Later, the former Chief Minister of
Uttar Pradesh Mayawati stated the situiation to "a financial emergency", by sayi
ng "It looks as if Bharat has shut down." Also, Sitaram Yechury from Communist P
arty of India, questioned the current government on the demonetisation move by s
tating "only 6% of black money in India is in cash to drive his point that demon
etisation won't curb illicit wealth."[99]
On 17 November 2016, in a rally against demonetisation of ?500 and ?1000 notes,
led by the Chief Minister of Delhi Arvind Kejriwal and his West Bengal counterpa
rt Mamata Banerjee at Azadpur Mandi, the biggest vegetable and fruits wholesale
hub in the national capital, Arvind Kejriwal demanded the withdraw of demonetisa
tion in 3 days, or else there would be a rebellion, he said. Mamata Banerjee als
o stated "I give the government 3 day ultimatum, fix things or withdraw the demo
netisation scheme".[100]
In the demonetisation debate on the second and third day of the Winter Session o
f Parliament at the Rajya Sabha, on 17 and 18 November 2016, the opposition and
the current government clashed over the demonetisation issue, bringing the house
to continuous halts.[101]
On 24 November 2016, in the demonetisation debate in Rajya Sabha, the former pri
me minister of India Manmohan Singh said "this scheme will hurt small industries
, the farming sector. The GDP can decline by about 3 per cent due to this move",
while he also questioned "I would like to ask the Prime Minister examples of co
untries where people have deposited their money in the banks and not allowed to
withdraw their own money." and later also said "It is no good that on each day b
anks bring out new notifications. It doesn't reflect properly on Prime Minister'
s Office, Finance Minister and the Reserve Bank of India. Cooperative banking sy
stem has been prevented from handling cash".[102] Singh at last termed the demon
etisation move as an "organized loot, legalized plunder of the common people".[1
03]
Strikes
Main article: Aakrosh Diwas
As the demonetisation was opposed in both houses of the parliament, it triggered
organised nationwide strikes across India, noticeably starting 28 November 2016
.[104] In the state of Bihar, 15 trains were blocked and stranded, while the sta
tes of West Bengal, Maharashtra and Uttar Pradesh saw protest marches and rallie
s led by opposition parties.[104] In the state of Kerala, shops and business est
ablishments were shut, with school and colleges closed throughout the state, whi
le movements of private vehicles were also disrupted in Northern Kerala.[104]
Effects and aftermath
Unbalanced scales.
This section reads like a press release, or is otherwise written in a promotiona
l tone. Please help by rewriting this article from a neutral point of view. When
appropriate, blatant advertising may be marked for speedy deletion with {{db-sp
am}}. (December 2016)
Cash rush
Queue at an ATM for ?100 banknotes in Howrah, on 8 November 2016, 22:23 (IST)
People queue outside a private bank to deposit and exchange old ?500 and ?1000 b
anknotes in Kolkata on 10 November 2016.
The scarcity of cash due to demonetisation led to chaos, and most people holding
old banknotes, faced difficulties to exchange them as endless lines outside ban

ks and ATMs across India, became a daily routine for millions of people waiting
to deposit or exchange the ?500 and ?1000 banknotes since 9 November.[10][9][8][
105] ATMs were running out of cash after a few hours of being functional, and ar
ound half the ATMs in the country were non-functional.[9] Sporadic violence was
reported in New Delhi, but there were no reports of any grievous injury,[106] pe
ople attacked bank premises and ATMs,[107][108][109][110][111][112] and a ration
shop was looted in Madhya Pradesh after the shop owner refused to accept ?500 b
anknotes.[113][114][115][116]
Several people were reported to have died from standing in queues for hours to e
xchange their old banknotes.[117][118][119][120][121][122] Deaths were also attr
ibuted to lack of medical help due to refusal of old banknotes by hospitals.[123
][124][125] As of 15 November 2016, the attributed death toll was 25.[126][127][
11] In an interview, Chief Minister of Delhi Arvind Kejriwal lashed out at a BBC
reporter who asked him to justify his 19 November claim that 55 deaths were lin
ked to demonetisation.[128] While, the CMD of Punjab National Bank said that pan
ic after demonetisation started fading on 19 November 2016.[129]
Stock market crash
As a combined effect of demonetisation and US presidential election, the stock m
arket indices dropped to an around six-month low in the week following the annou
ncement. The day after the demonetisation announcement, BSE SENSEX crashed nearl
y 1,689 points and NIFTY 50 plunged by over 541 points.[12] By the end of the in
traday trading section on 15 November 2016, the BSE SENSEX index was lower by 56
5 points and the NIFTY 50 index was below 8100 intraday.[130]
Transportation halts
After the demonetisation was announced, about 800,000 truck drivers were affecte
d with scarcity of cash, with around 400,000 trucks stranded at major highways a
cross India were reported.[131] While major highway toll junctions on the Gujara
t and Delhi-Mumbai highways also saw long queues as toll plaza operators refused
the old banknotes.
Nitin Gadkari, the Minister of Transport, subsequently announced a suspension of
toll collections on all national highways across India until midnight of 11 Nov
ember, later extended until 14 November and again until midnight of 18 November,
and yet again till 2 December.[132][133]
Agriculture
Wiki letter w.svg
This section is missing information about effects of demonetisation on agricultu
re and farmers. Please expand the section to include this information. Further d
etails may exist on the talk page. (November 2016)
Transactions in the Indian agriculture sector are heavily dependent on cash and
were adversely affected by the demonetisation of ?500 and ?1,000 banknotes.[134]
Due to scarcity of the new banknotes, many farmers have unsufficient cash to pu
rchase seeds, fertilisers and pesticides needed for the plantation of rabi crops
usually sown around mid-November.[135] Farmers and their unions conducted prote
st rallies in Gujarat, Amritsar and Muzaffarnagar against the demonetisation as
well as against restrictions imposed by the Reserve Bank of India on district co
operative central banks which were ordered not to accept or exchange the demonet
ised banknotes.[136][137][138][139]
Banking
A State Bank of India branch remained open at night, and a long queue of people
waited outside the ATM to withdraw money
In the first four days after the announcement of the step, about ?3 trillion (US
$45 billion) in the form of old ?500 and ?1,000 banknotes had been deposited in
the banking system and about ?500 billion (US$7.4 billion) had been dispensed vi

a withdrawals from bank accounts, ATMs as well as exchanges over the bank counte
rs. Within these four days, the banking system has handled about 180 million tra
nsactions.[31] The State Bank of India reported to have received more than ?300
billion (US$4.5 billion) in bank deposit in first two days after demonetisation.
[140][141][142] A spike in the usage of debit card and credit card post demoneti
sation was also reported.[143]
Between November 10 and November 27, banks reported exchange and deposits of dem
onetised banknotes worth ?8.45 trillion (US$130 billion) (exchange of ?339.48 bi
llion (US$5.0 billion) and deposits of ?8.11 trillion (US$120 billion)). During
this period, an amount of ?2.16 lakh crore had been withdrawn by people from the
ir accounts.[144]
In Malda, a district believed to be a transit-point for fake Indian currencies,[
145] a large sum of cash deposits in dormant accounts were also reported. Accord
ing to The Economic Times, more than 80 percent of fake currency in India origin
ates from Malda district in West Bengal.[146]
Business
By the second week after demonetisation of ?500 and ?1,000 banknotes, cigarette
sales across India witnessed a fall of 30 40%,[147] while E-commerce companies saw
up to a 30% decline in cash on delivery (COD) orders.[148][149] Several e-comme
rce companies hailed the demonetisation decision as an impetus to an increase in
digital payments. They believe that it would lead to a decline in COD returns w
hich is expected to cut down their costs.[150]
The demand for point of sales (POS) or card swipe machines has increased.[151] E
-payment options like PayTM and PayUMoney has also seen a rise.[152] According t
o data of Pine Labs, the demand for its POS machines doubled after the decision.
Further it states that the debit card transactions rose by 108% and credit card
transactions by 60% on 9 November 2016.[151]
Municipal and local tax payments
As the use of the demonetised notes had been allowed by the government for the p
ayment of municipal and local body taxes, it led to people using the demonetised
?500 and ?1,000 notes to pay large amounts of outstanding and advance taxes. As
a result, revenue collections of the local civic bodies jumped. The Greater Hyd
erabad Municipal Corporation reported collecting about ?1.6 billion (US$24 milli
on) in cash payments of outstanding and advance taxes, within 4 days.[153]
Income tax raids and cash seizures
The Finance Ministry instructed all revenue intelligence agencies to join the cr
ackdown on forex traders, hawala operators and jewellers besides tracking moveme
nt of demonetised currency notes.[154]
Income Tax departments raided various illegal tax-evasive businesses in Delhi, M
umbai, Chandigarh, Ludhiana and other cities that traded with demonetised curren
cy.[155] The Enforcement Directorate issued several FEMA notices to forex and go
ld traders.[154] It also raided several forex establishments making back dated e
ntries.[156] Large sum of cash were seized in different parts of the country.[15
7][158][159][160][161] In Chhattisgarh liquid cash worth of ?4.4 million (US$65,
000) was seized.[162]
Insurgent groups
The move also reportedly crippled Communist guerrilla groups (Naxalites) financi
ng through money laundering.[163][164] On 10 November the police arrested a petr
ol pump owner at Ranchi when he reportedly tried to deposit ?2.5 billion, belong
ing to a person affiliated with the banned Communist Party of India.[165] Accord
ing to Chhattisgarh Police demonetisation has affected the Naxalite activities.
It is reported that insurgents have stashed more than ?70 billion in the Bastar

region.[164][166][167] Mumbai Police reported a setback to Hawala operations.[16

8][169] Hawala dealers in Kerala were also affected.[170] The Jammu and Kashmir
Police reported the effect of demonetisation on hawala transactions of separatis
ts.[171][172] The move has also helped in reducing the incidents of stone-peltin
g in valley.[173][174][175] More than 300 Naxals have surrendered to the police
voluntarily due to shortage of funds.[citation needed]
Railways
As of November 2015, Indian Railways did not have the option to make payment wit
h cards at the counters. After the demonetisation move, the government announced
to make card payment options available at railway counters in the country.[176]
Evasion attempts
A jewellery store in a shopping mall with a notice "We accept ?500 and ?1000 not
es", even after they were no longer valid banknotes.
Gold purchases
In Gujarat, Delhi and many other major cities, sales of gold increased on 9 Nove
mber, with an increased 20 to 30% premium surging the price as much as ?45,000 (
US$670) from the ruling price of ?31,900 (US$470) per 10 grams (0.35 oz).[177][1
78]
Donations
Authorities of Sri Jalakanteswarar temple at Vellore discovered cash worth ?4.4
million (US$65,000) from the temple Hundi.[179]
Multiple bank transactions
There have also been reports of people circumventing the restrictions imposed on
exchange transactions and also attempting to convert black money into white by
making multiple transactions at different bank branches.[180] People were also g
etting rid of large amounts of banned currency by sending people in groups to ex
change their money at banks.[181] In response, the government announced that it
would start marking customers with indelible ink. This was in addition to other
measures proposed to ensure that the exchange transactions are carried out only
once by each person.[182][183][184] On 17 November, the government reduced the e
xchange amount to ?2,000 (US$30) to discourage attempts to convert black money i
nto legitimate money.[33]
Railway bookings
As soon as the demonetisation was announced, it was observed by the Indian Railw
ays authorities that a large number of people started booking tickets particular
ly in classes 1A and 2A for the longest distance possible, to get rid of unaccou
nted cash. A senior official said, "On November 13, 42.7 million passengers were
nationally booked across all classes. Of these, only 1,209 were 1A and 16,999 f
or 2A. It is a sharp dip from the number of passengers booked on November 9, whe
n 27,237 passengers had booked tickets in 1A and 69,950 in 2A."[185]
The Railways Ministry and the Railway Board responded swiftly and decided that:
cancellation and refund of tickets of value ?10,000 and above will not be allowe
d by any means involving cash. The payment can only be through cheque/electronic
payment. Tickets above ?10,000 can be refunded by filing ticket deposit receipt
only on surrendering the original ticket. A copy of the PAN card must be submit
ted for any cash transaction above ?50,000. The official claimed that since the
Railway Board on 10 November imposed a number of restrictions to book and cancel
tickets, the number of people booking 1A and 2A tickets came down.[185][186]