500 rupee and 1,000 rupee notes will cease to be legal tender, Prime Minister Modi said in an unscheduled address to the nation. Chaos prevailed across major cities as people lined up outside cash dispensing machines following the announcement, while the S&P BSE Sensex tumbled as much as 6.1 percent.

The step by Modi, who is approaching the half-way mark of his term, is an attempt to fulfill his election promise of curbing tax evasion and recovering illegal income, locally known as black money, stashed overseas. Modi’s unprecedented move follows similar action taken by the European Central Bank, which is discontinuing the use of 500-euro notes to stop their use in “illicit activities.”

New Delhi and Mumbai, the nation’s commercial hub, witnessed massive rush outside fuel stations which are exempted from the curbs until Nov. 11. This is the first time since 1978 the government has withdrawn money from circulation. Banks are set to see a jump in deposits, boosting liquidity in the financial system even as cash in circulation sees an immediate contraction, economists said. Depending on how those funds get deployed, there could be an impact on growth and inflation, though it may not last.

The Reserve Bank of India will issue new currency notes of 2,000 rupees and 500 rupees.

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