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Ban on Rs 1000 & Rs 500 notes: Not to panic, urged Prof JD Agarwal, Chairman & Professor of Finance, Indian Institute of Finance
Prof JD Agarwal whole heartedly welcomed the decision of the government announcing ban on Rs 1000 and Rs 500 notes to unearth black money, reduce corruption, curbing the use of counter fiet currency, and blocking the funding of terrorism and other activities including pumping in real estate and stock markets.

It is indeed a bold and a very right decision. People should cooperate and bear the inconveniences caused in their daily lives including on special occasions like marriages, or emergency situations (being stranded on the road side, stations, bus stands or in hospitals etc), due to non-availability of smaller currency notes.

But after the announcement of ban on Rs 1000 and Rs 500 notes by the Hon'ble Prime Minister of India Mr Narendra Modi, an extreme panic situation has emerged particularly after his announcement that the currency of this denomination is reduced to a piece of paper after the midnight of 8th November, 2016.

People in general, disheartened and extremely worried about their holdings of these currency notes are burning currency, or treating these notes like garbage or spending in distress. In Prof Agarwal's opinion there is nothing to worry about their holdings. As a holder of these currency notes, you have the right to get other valid currency in exchange from the Reserve Bank of India or through various banks under RBI's control or recover it from the Central government - the guarantor of these currency notes.

The currency note of Rs 1000 & Rs 500 with you is a promissory note issued by the Governor of Reserve Bank of India. It is guaranteed by the Central Government. It is the duty of the Governor of Reserve Bank of India to replace your Rs 1000 or Rs 500 note with equivalent valid currency of other denomination.

In case the Reserve Bank of India does not replace it, you can ask the Central government to give you the equivalent value of this currency as it is guaranteed by the Central government. A guarantor (Central government in this case) cannot withdraw its guarantee mentioned on these currency notes. The following promise does not say that you are to be holder-in-due course. At the most, various departments of the government can ask for the source of money which you exchange or deposit in your bank account.

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