Prime Minister Address:
A Demonetization- Progress Report for decision taken on 8 November 2016, announcement was made by the Prime Minister of India Narendra Modi in an unscheduled live televised address to the nation at 20:15 IST. In the announcement, Modi declared circulation of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series as invalid effective from the midnight of the same day, and announced the issuance of new ₹500 and ₹2000 banknotes of the Mahatma Gandhi New Series in exchange for the old banknotes.
After the official announcement by Prime Minister Modi, the Governor of the Reserve Bank of India, Urjit Patel, and Economic Affairs secretary, Shaktikanta Das explained in a press conference that while the supply of notes of all denominations had increased by 40% between 2011 and 2016, the ₹500 and ₹1000 banknotes increased by 76% and 109% respectively in this period owing to forgery. This forged cash was then used to fund terrorist activities against India. As a result the decision to eliminate the notes had been taken.
Patel also informed that the decision had been made about six months ago, and the printing of new banknotes of denomination ₹500 and ₹2000 had already started. However, only the top members of the government, security agencies and the central bank were aware of the move. But media had reported in October 2016 about introduction of ₹2000 denomination well before the official announcement by RBI. This statement has led to much debate, because the Reserve Bank governor six months before the announcement was Raghuram Rajan, while the new banknotes have the signature of the newly appointed governor, Urjit Patel.