NEW DELHI, November 14, 2016 /PRNewswire/ -- Facts The demonetization of 500 and 1000 rupee banknotes is a step taken by the Government of India on 8th November 2016 to fight corruption and black money issues in the country. Starting from midnight of 8th November 2016, all 500 and 1000 rupee notes ceased to be accepted as a form of legal tender in India. The announcement was made by the Prime Minister of India, Mr. Narendra Modi in a live televised address to the nation. In the announcement, Modi declared circulation of all 500 and 1000 rupee banknotes (approximately $7.50 and $15 USD respectively) of the Mahatma Gandhi series as invalid and announced the issuance of 500 and 2000 rupee banknotes (approximately $7.50 and $30 USD respectively) in the new Mahatma Gandhi series in exchange for the old banknotes. (Photo: http://photos.prnewswire.com/prnh/20161114/438682 ) On 28th October 2016, the total currency in circulation in India was Rs. 17.77 lakh crore (US$260 billion). In terms of value, the annual report of Reserve Bank of India of 31st March 2016 stated that total banknotes in circulation valued to Rs. 16.42 lakh crore (US$240 billion) of which nearly 86% (i.e. Rs. 14.18 lakh crore (US$210 billion)) was 500 and 1000 rupee notes. In terms of volume, 24% (i.e. 2,203 crore) of the total 9,026.6 crore banknotes were in circulation. Globally, this is not unusual. Central banks of several countries pump massive amounts of cash into the economy, mostly in very large denominations. In the US, $100 note accounts for 80% of the cash supply. In Japan, ¥10,000 note (about $100) accounts for 90% of total cash holdings. Across countries, most of this cash has been supporting underground black economies. This is not the first government to demonetize large currency bills. European Central Bank head Mario Draghi announced that they were considering abolishing the region's most-valuable bank note (the 500 euro bill) in order to curb tax evasion and terrorism financing. Also, US treasury recommended that the $100 bill be demonetized. Why it is done?