Nov 9 (Lagos) - Government of India announced that notes of 500 RUPEES and 1000 RUPEES will no longer be legal tender. It is estimated that most of India's black money (unaccounted funds) are stashed in denominations of 500 & 1000.
The current official exchange rate of RUPEE - NAIRA is N 4.72 to 1 Rupee. The bank rate is likely in the region of N 6 per Rupee or higher due to constant Naira depreciation.
Government will issue new 500 and 2000 RUPEE notes to exchange current currency returned by the citizens. There is limit on how much can be exchanged at a given time.
Government has provided 72 hours for people to head to banks, post offices, railway stations, airports and hospitals to exchange old notes with new notes.
There is also a limit on how much people can withdraw from ATM's but this is temporary.
There are no restrictions on e-money transactions.
Recovery of black money was a major election promise that PM Modi pitched during his election rallies before being elected in 2014. US 10 billion has already been recovered by the government under a tax amnesty scheme that concluded in the 3rd quarter of 2016.
This move makes 500 & 1000 RUPEE currency notes useless unless exchanged within the next 72 hours. An identification number has to be provided when exchanging the notes.
This is a big victory for Indian government towards curbing money laundering in a Country where majority of people still don't pay any tax.
Nigeria should look at some of the measures that India has implemented in 2016 to uncover hidden funds. Such a move in Nigeria could be a game changer and force people to deposit their money in the bank.
reporting for easykobo.com on Wednesday, Nov 9 2016 from Lagos, Nigeria
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