2016-11-14 Mon

Well...2016 seems to be a bad year for higher denomination currencies. And guess what, India is not the only one to take such a decision!

In a drastic move against corruption, terrorism and forgeries, Narendra Modi (PMO India), announced that INR 500 and INR 1000 currency notes are scrapped as legal tender from the midnight of 8th November 2016. The nation is still coming to terms with this and the government, the RBI and the banks in India are trying their best to help the panic struck common man.

Much things both, favourable and unfavourable, are been said about this move. But did you know that a similar decision has already been taken by a political and financial giant?

Britain, a country outside the euro zone, has prohibited the distribution of the €500 note by banks and currency exchanges since 2010.

Further, the European Central Bank (ECB) had announced on May 4th, 2016, that production from 500 euro currency notes will be stopped around the end of 2018!

The 500 Euro note or the so-called “Bin Laden banknote” had been a problem for the countries in the eurozone of the European Union. Though this high-value banknote accounts for a third of all the euro notes in circulation, the notes are rarely held in Europe. A report says that a good amount of these notes is held by gangs and smugglers outside of Europe. The French finance minister, Michel Sapin, said: “the notes are used more to conceal than to purchase”. Tax evasions, money launderings, corruptions, and funding of militant activities are on rampant and all of this becomes much easier with higher denomination notes.

Aren’t these the same reasons why our government has taken this step? Furthermore, USB AG, a Swiss global financial services company, has advised other countries facing similar problems to take a lead from India!

As per their advice scrapping of the large denomination notes (AUD 50, AUD 100) in Australia would be good for the economy and to the banks also. The resultant effect would be a fall in crimes, tax evasions, illicit transactions and an increase in bank deposits.

When everything is said and done, let’s hope that India’s initiative in this battle against terrorism, corruption, and counterfeiting sets an example for the entire world to follow!

Jai Hind!