Timeline: How India’s Offensive Against Cash Unfolded

Wall Street Journal – by Raymond Zhong

A month ago, India asked more than 1.2 billion people to turn out their pockets and turn in their old bank notes, all in an effort to stamp out corruption and tax evasion.

A colossal undertaking by any standard, the experiment has unfolded in ways that few nations’ administrators might have been able to predict. That has forced the Indian government to adapt, sometimes without warning, to minimize disorder.  

Here is a timeline of how events unfolded.

Nov. 8: Prime Minister Narendra Modi appears on primetime television to announce that all 500- and 1,000-rupee notes (worth $7.40 and $14.80 respectively) are no longer legal tender after midnight. Mr. Modi says voided bills will continue to be accepted for certain kinds of transactions—buying bus and train tickets, for instance, and paying bills at government hospitals—until Nov. 11. Indians will also be able to deposit old cash into their bank accounts until Dec. 30.

Nov. 9: Banks and ATMs across the country are out of service as cash begins to be replaced.

Nov. 10: Banks around the country re-open. ATMs remain out of operation.

Nov. 11: The government allows old bills to be used for exempted transactions until Nov. 14 and assures the public there is enough cash available with the central bank.

Nov. 12-13: Banks are kept open over the weekend to meet demand for deposits and exchanges.

Nov. 13: The limit for exchanging old notes at banks and post offices is raised to 4,500 rupees a day from 4,000 rupees. The weekly limit for over-the-counter cash withdrawals is increased to 24,000 rupees from 20,000 rupees. The previous 10,000 rupees-a-day limit on such withdrawals is scrapped.

Nov. 14: The government extends its previous exemptions through Nov. 24.

Nov. 15: Banks are ordered to ink people’s fingers when they come in to exchange old cash to prevent “misuse” of the service.

Nov. 17: The limit on cash exchanges is lowered to 2,000 rupees from 4,500 rupees. Families holding weddings are permitted to take out up to 250,000 rupees in cash.

Nov. 21: With the sowing of winter crops underway, farmers are permitted to buy seedsusing old 500-rupee notes.

Nov. 24: The government says banks and post offices will no longer exchange old notes for new ones, in an effort to encourage people to open bank accounts. Previous exemptions are extended through Dec. 15.

Nov. 29: The lower house of Parliament approves changes to income-tax laws aimed at encouraging Indians to come clean about their undisclosed income and pay a penalty.

Dec. 1: Old bank notes are no longer accepted at state-run gas stations or airport ticket counters.

Dec. 2: National highways resume collecting tolls for the first time since large bills were canceled. The government says toll booths are equipped with swipe machines for receiving card payments.


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