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India discontinued its biggest denomination currency notes overnight in what is Watch Chrysalis Onlinebeing seen as its biggest attempt to curb black money flow, corruption, counterfeiting and terrorism financing.

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In a surprise announcement last evening, Indian Prime Minister Narendra Modi said that currency notes of Rs 500 and Rs 1,000 denominations will carry no value starting Wednesday. The government said it will shortly introduce new Rs 500 and Rs 2,000 notes.

“To break the grip of corruption and black money, we have decided that the five hundred rupee and thousand rupee currency notes presently in use will no longer be legal tender from midnight tonight, that is 8th November 2016. This means that these notes will not be acceptable for transactions from midnight onwards. The five hundred and thousand rupee notes hoarded by anti-national and anti-social elements will become just worthless pieces of paper,” Modi said in a televised address to the nation.

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"In the past decades, the spectre of corruption and black money has grown. It has weakened the effort to remove poverty. On the one hand, we are now No. 1 in the rate of economic growth. But on the other hand, we were ranked close to one hundred in the global corruption perceptions ranking two years back. In spite of many steps taken, we have only been able to reach a ranking of seventy-six now. Of course, there is improvement. This shows the extent to which corruption and black money have spread their tentacles," Modi said.

"There comes a time in the history of a country’s development when a need is felt for a strong and decisive step. For years, this country has felt that corruption, black money and terrorism are festering sores, holding us back in the race towards development," he added.

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People who have old Rs 500 and Rs 1,000 bills have till Dec. 30 to deposit it to a bank or the post office. Modi said that the move will force corrupt people, including terrorists, to either deposit the large stash of cash they have to a bank -- and hence declare it -- or sit on it and lose all the cash.

Though devaluing a currency note isn't unheard of, it's the boldest and most strategic move by an Indian prime minister in several decades, many say. The move follows an amnesty scheme not long ago by Modi to allow people to declare their illegal wealth by end of September. Over Rs 1,250 billion ($18.6 billion) worth of previously undisclosed money was declared under the scheme, Prime Minister Modi revealed.

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The transition to new notes, though, has caused a major sense of panic among many. All banks in the country will remain shut today and ATMs will remain shut till tomorrow, in order to prepare for the transition. Even when they open, limits will be placed during the first few weeks on how much old currency can be swapped for cash as well as limits on the amount of money people will be able to withdraw from ATMs in a day.

Soon after the shocking announcement, people could be seen queuing up to withdraw cash in Rs 100 bills. Most ATMs in India are stocked with the higher denomination currency bills that are now untenable.

In place of the older Rs 500 and Rs 1,000 bills, the government will introduce an updated Rs 500 bill and a brand bill in Rs 2,000 denomination. The objective is to flush out the older bills, which the government believes have been counterfeited and used against India to fund terrorist operations.

"Terrorism is a frightening threat. So many have lost their lives because of it. But have you ever thought about how these terrorists get their money? Enemies from across the border run their operations using fake currency notes. This has been going on for years. Many times, those using fake five hundred and thousand rupee notes have been caught and many such notes have been seized," Modi said during his address.

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