Indian Prime Minister Narendra Modi said today that 500 and 1,000 rupee notes would be withdrawn from circulation from midnight in a bid to tackle corruption.
"To break the grip of corruption and black money, we have decided that the 500 and 1,000 rupee currency notes presently in use will no longer be legal tender from midnight 8 November, 2016," Modi said.
He made the shock announcement on television today.
Modi said that although the existing notes would be "worthless", members of the public would be able to exchange them for new bills at banks until the end of the year.
"Black money and corruption are the biggest obstacles in eradicating poverty," Modi said in an address to the nation.
New 500 and 2,000 rupee denomination notes will be issued at a later date, he added.
Today's announcement comes just over a month after the government raised nearly $10 billion through a tax amnesty for Indians to declare hidden income and assets.
A report by US-based think-tank Global Financial Integrity estimated that India lost $344 billion in illicit fund outflows between 2002 and 2011.
Modi also said militants operating against India were using fake versions of the 500 rupee note, worth about $7.50 at current exchange rates.
"Terrorism is a frightening thing. But have you everthought about how these terrorists get their money? Enemies from across the border have run their operations using fake currency notes. This has been going on for years," Modi said.
Some officials and experts said the move was the biggest in decades aimed at fighting graft.
"It is like a surgical strike on black money," said India's Revenue Secretary Hasmukh Adhia.
