Closer look: Modi's demonetisation

Last Updated: Thu, Dec 01, 2016 11:39 hrs

Modi's currency purge

The Indian government announced the withdrawal of 500 and 1,000 rupee notes from circulation in a bid to bring billions of dollars worth of unaccounted wealth into the mainstream economy and curb corruption. The move has sparked chaos for hundreds of millions of Indians, who operate in a cash economy and have struggled to replace the banned currency.

New high-security 500 rupee notes have been introduced and distributed by designated banks.

The 1,000 rupee notes have been removed from circulation. New 2,000 denomination notes have been introduced instead.

Growth in number of banknotes

The rising number of banknotes has outpaced the expansion of India's economy. In the past five years, circulation of currency notes grew 40 percent, compared with 30 percent economic growth. The increase in 500 and 1,000 rupee notes has been the steepest.

Banknotes in circulation

While the number of 500 and 1,000 rupee notes combined account for less than a quarter of all notes, they are worth over 86 percent of the value in circulation.

Counterfeit banknotes

By eliminating counterfeit currency, the government also hopes to hit the finances of militants who target India and are suspected of using fake 500 rupee notes to fund operations.

More from Sify: