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I think that they're actually reissuing them.  Lots of people in India keep cash stashed away in their home for emergencies and weddings, for instance.  That money is often gotten in under-the-table transactions and isn't taxed, or wasn't.

As I understand it, you have a limited time to exchange the old notes for the new ones and explain how you came about the money, much like taking $100,000 in US notes and depositing them into your personal bank account.  If you can't document the money, you get taxed at a certain rate and still get new notes for the remainder.

Even the poorest of the poor keeps a SHTF fund, so it's pretty widespread.

Chris

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And their population is disarmed and easy to cow so they will submit.

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I doubt if a new currency is being issued.  If it was, then it would be a matter of exchanging old notes for new notes and that's not being done here.  

On 8 November, Prime Minister Narendra Modi gave only four hours' notice that virtually all the cash in the world's seventh-largest economy would be effectively worthless.

It certainly took everyone in India by surprise. But then, Prime Minister Narendra Modi has a flair for the dramatic. In an unexpected primetime address on Tuesday, he announced that in a few hours, millions of high-denomination currency notes would no longer be legal tender. It was the only way, he insisted, to deal with “the disease” of unaccounted-for income -- or “black money,” as it’s called in India. “Your money will remain yours,” he assured a stunned citizenry -- as long as you get around to depositing it in post offices sometime over the next several weeks.

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...
They would love nothing more than to force a replacement of a chunk of each person's IRA and 401(k) with government bonds that have crappy or no value considering their low interest rates and inflation working against the returns.  Don't want to agree?  Fine.  Lose the IRA and 401(k) tax wrappers.  Pay more taxes.

By hook or by crook.
...

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This kind of currency "exchange" happened in Mexico several years back.

We used to go down there with a church group and do mission work.  We always wound up bringing some currency back with us.  A few years elapsed and we went back, taking some of the currency just to get rid of it.  The Mexican government had withdrawn the old notes and required the people to exchange for the new currency.  Our currency was worthless.  It wasn't worth much to start with.  I gave it to one of the kids who was determined to cash it in and he went to a bank.  They sent him packing.

This is something that worries me a little, as I wouldn't put it past our leaders to do something like this.

I still have the Mexican silver coins that I managed to accumulate over the years.

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Just read on Zero Hedge that the tax guys are doing searches on people's houses, no warrant, and confiscating gold.

President Nicolás Maduro said on Sunday that the 100-bolivar note, which is currently worth only two US cents (1.6p) on the black market, will be withdrawn on Wednesday. Venezuelans will then have 10 days to exchange the notes at the central bank.

A decision by New Delhi on November 8 to scrap all large-denomination banknotes overnight removed 86 per cent of India’s currency from circulation. In an effort to prevent banks running out of cash, the finance ministry then imposed strict limits on the amount of new notes that could be withdrawn. Customers can currently withdraw just Rs2,500 from an ATM per day — equivalent to $37 — or Rs24,000 over the counter per week.

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Financial repression in India takes hold as withdraws are limited following mandatory depositing of 1,000 and 500 rupee notes.



Link

What happens there can happen here.  Heck, try to go into the bank and withdraw $50k right now.  Nope, come back in a few days and be prepared to be questioned by the bank manager (as well as having your name reported).

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They checked your name against several databases to see if you were involved in any crimes.  Big Brother Best Brother.  As the Romanian woman mentioned above said, most Americans are unaware of the police state that is slowly coming down on them.

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With the current administration, I am skeptical that cashless-society controls, or withdrawing certain currency denominations are going to happen any time soon. Trump appears to very much dislike globalism, and is a capitalist and a businessman.

But all it takes is the pendulum to swing back the other way someday...

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Great advantage for the banks is that they collect a percentage of every sale, which is passed onto the merchant who then passes it onto the consumer.  

75 cities will be designated cashless/less-cash townships, with an overwhelming 56 of them being in Gujarat. Modi is determined to bring India into the 21st century. He is being cheered behind the curtain and every government is keenly watching the results. The townships were actually selected on the basis of a recommendation by none other than Price Waterhouse Coopers (PWC) furthering the G20 agenda to stamp out tax evasion worldwide.

Over a billion people in India have no access to internet. When it is available, it is often very slow. Electricity is unreliable. Bank websites are extremely unwieldy. To make an online transaction, the login process is usually very complicated, often requiring several steps and verification codes sent as text messages.

More than a month ago, I paid online for a flight ticket from Delhi to London. The money left my account, but I never got the ticket. It was virtually impossible to get in touch with the Indian company I had bought the ticket from. When I did finally manage to contact them, they told me that they had refunded the money. The bank says it never got the refund. Of course, I have had to personally visit the bank every time and spend a long time waiting to talk to someone. In this electronic day and age, more than a month after the event, no-one knows where my money is.

It is hard to pinpoint who deserves the blame. Indians are extremely unskilled, uneducated (despite paper certificates aiming to prove otherwise), and lack work ethics. They almost never have passion for their jobs or an interest in providing  good services to their clients. This is the main feature characterizing many Indian companies. Management and owners lack professionalism and are singularly focused  on the bottom-line, by hook or by crook, eschewing true value-addition.

I know many people who refuse to use an ATM card. People refuse to make credit or debit card transactions, as they cannot trust the system. Many years ago my Indian credit card company refused to reverse an unauthorized charge. When I asked them to cancel my card, they upgraded my card and imposed a yearly fee. I had no choice but to stop making payments to end a never-ending cycle of problems.

Given the risks involved, many people simply walk down to the bank branch to make an online transaction, which obviously defeats the whole purpose of going digital. When Indians buy something online, they tend to use the “cash on delivery” option, a unique option for buyers in India, where people have no work ethics or trust in each other.

Virtually anyone one meets in India is perplexed about the charges banks impose on accounts these days. There are non-agreed fees and commissions that appear regularly, and on top of those, service taxes are charged. There are tens of charges which no one knows the reason for or is able to explain.

Bank employees favor you with a blank stare when you ask them for an explanation. Even Modi fans finds themselves boiling in anger when their bank statements arrive.

India’s attempt to go cashless will fail. India’s e-commerce companies will fail. The skills and ethics required to run big organizations simply do not exist in India. In the meantime, the forceful imposition of cashless transactions will only succeed in imposing massive costs on society.