On 8th November 2016, with the announcement from the Government of India, all the Rs 500 and Rs 1,000 banknotes of the Mahatma Gandhi series ceased to be legal tender. The government also announced the issuance of new Rs 500 and Rs 2,000 banknotes in exchange for the demonetized banknotes. Identify the concept being described in the above lines.

Demonetisation

Demonetisation: The Government of India, made an announcement on November 8, 2016 with profound implications for the Indian economy. The two largest denomination notes, 500, 1,000, were ‘demonetised’ with immediate effect, ceasing to be legal tender except for a few specified purposes such as paying utility bills. This led to eighty-six percent of the money in circulation invalid. The people of India had to deposit the invalid currency in the banks which came along with the restrictions placed on cash withdrawals. In other words, restrictions were placed on the convertibility of domestic money and bank deposits.