How Narendra Modi the Prime Minister of India ended Black money and corruption in India in one night !!

Narendra Modi in one of the most biggest political move yesterday in an emergency statement banned the current existing 500 rs and 1000 rs note .

 Currently Rs 17,54,000 crore worth of notes are in circulation according to the RBI’s database on the Indian economy.Of this Rs 500 notes constituted almost 45% of the currency in circulation while 39% of the notes were of the Rs 1,000 denomination. In value terms.

However in terms of volume, Rs 10 and Rs 100 notes constituted 53% of the notes in circulation.This measure would mean that from midnight, almost Rs 6,32,600 crore in circulation in the form of Rs 1,000 notes would be illegal tender. 

To replace them, Rs 2,000 notes would be introduced, which according to the government would be limited in circulation.RBI data shows that in 2015-16, almost 6.5 lakh counterfeit notes were detected in commercial banks of which almost 4 lakh were in the Rs 500 and Rs 1,000 category. It is in this context that the government wants to re-monetise the Rs 500 note while de-monetizing the Rs 1,000 note. But the number of Rs 100 counterfeit currency were also close to 2 lakh this year. 

BUNNY THE CORRUPT

 Let's see this situation from the eyes of a corrupt person.

There is a guy, Bunny. Bunny is corrupt and has a lot of black money. Let's say he has about 10 crores. Now he can not store this money in banks.

 (Banks ask for income source, tax and other issues)So to store his money safely Bunny creates some secret lockers behind walls of his house.But 10 crores is massive ammont. 

He can't manage this money in small currency notes. So he converts his money into 1000 rupees notes and then keeps it safe in his secret lockers.Bunny is happy. He can do corruption. Can safeguard his money. And Government had not a single clue about his activities because there are lots of bunnies out there. 

Government can't keep a close eye on every one of them.So, bunny has 100,000,000 rupees. That is100,000 notes of 1000 rupees.Now comes the TWIST in bunny's life.Government demonitizes all 1000 and 500 rupee notes.Bunny has a big problem. His all money worths zero now. 

He must exchange his 1000 rupees notes with smaller currency notes which he can't because for exchanging money, he must give a proof about source of 10 crore rupees.
(to government)

What if, Bunny burns all his money and again acquires black money, but this time in 10 and 100 rupee notes. Naturally it will become harder for him to store that money because he has five times more notes this time. Plus more notes means it becomes harder to use them.

Story ends. 

 This will also lead to Inflation (not overnight)

There will be a lot of people who have a lot of cash, legally earned, which they will deposit it in the bank.Now the bank with more deposits can do more lending.Credit (loans) will become easier and interest rates may come down. More loans given out increases broad money supply and creates inflation. But this will happen slowly, not over-night. 

 Some of the benefits of this move are: (Pros)

• It will help the government to fight Black money, corruption, terrorism and counterfeit currency with one single decision.
• Arms smuggling, espionage and terrorist related activities will be choked due to lack of funding.
• Counterfeit currencies are being used for financing terrorism which is being run by the enemy in India. Now Govt has taken a bold move which enables them to fight counterfeit currency/terrorist funding activities.

source :- https://www.quora.com/How-will-scraping-of-500-and-1000-rupees-notes-help-in-curbing-corruption-and-black-money?__snid3__=483909876&__nsrc__=2&__filter__=&redirected_qid=11071872#