On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series. The government claimed that the action would curtail the shadow economy and crack down on the use of illicit and counterfeit cash to fund illegal activity and terrorism, but seems to be a failure.
As many as 99.3 per cent of the old 500 and 1,000 rupee notes have been returned, the Reserve Bank of India said in its annual report. Out of Rs 15.41 lakh crore worth 500 and 1,000 rupee notes in circulation before November 8, 2016, notes worth Rs 15.31 lakh crore have been returned.
The Reserve Bank of India said “The humungous task of processing and verification of specified bank notes (SBNs) was successfully achieved. The SBNs received were verified, counted and processed in the sophisticated high-speed currency verification and processing system (CVPS) for accuracy and genuineness and then shredded.”