India marks ten years since withdrawal of specified banknotes

The tenth anniversary of the 2016 demonetisation announcement fell on 8 November 2026. On 8 November 2016, the Union government announced that specified ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series would lose their legal tender status from the following day. The notification provided limited exceptions. The change applied to specified banknotes, so a reference to the denomination alone does not fully describe the measure.

The Reserve Bank of India issued instructions on how holders could tender affected notes at banks for credit to their accounts or use the permitted exchange facility. The decision was later challenged in the Supreme Court. On 2 January 2023, a Constitution Bench upheld the measure by a majority of four judges to one in Vivek Narayan Sharma v. Union of India. The anniversary recalls the original currency decision and the legal power used to make it.

Facts to remember

• Announcement: 8 November 2016; tenth anniversary: 8 November 2026.
• The specified denominations were ₹500 and ₹1,000 in the Mahatma Gandhi Series.
• The notification used Section 26(2) of the Reserve Bank of India Act, 1934.
• The Supreme Court upheld the measure by four votes to one on 2 January 2023.

Background

Section 26 of the Reserve Bank of India Act deals with the legal tender character of banknotes. Under subsection (2), the Union government may issue a notification on the recommendation of the Reserve Bank’s Central Board to withdraw the legal tender status of the specified series of a denomination, subject to any exceptions stated in the notification.

Why it matters for exams

For CLAT Economy, Judiciary and UGC-NET Law, connect legal tender and currency management with the statutory role of the government and the Reserve Bank.