Prime Minister Narendra Modi stunned the nation by announcing that the currency notes of Rs 500 and Rs 1,000 denomination will be discontinued from Tuesday midnight.
The unprecedented decision received a thumbs up from the leaders in the banking sector and industrialists who termed it as "a bold and revolutionary" step, and also affirmed their commitment to smoothen the transition.
"We will strive to restock ATMs at the earliest and make them operational. The government has given enough exemptions to ensure urgent needs are met. We will work round the clock to ensure that customers have a smooth experience," State Bank of India chairperson Arundhati Bhattacharya said.
She said the banking system has handled such demonetisation in the past as well and will do so again this time. Banks will be closed on Wednesday to withdraw existing Rs 500 and Rs 1,000 notes from counters and ATMs (automated teller machines).
ICICI Bank chief Chanda Kochhar said, "it's perhaps the most significant move ever taken to curtail the parallel economy. It will give a sharp boost to all formal channels of payments which in turn will help the formal economy to grow at a faster clip in the long term."
"It is a big reform which no one expected and will have a huge impact on people who are hoarding money and not disclosing money for tax purposes," mortgage major HDFC chairman Deepak Parekh said.
He said the realty sector, which depends a lot on cash transactions, may be impacted and construction activity can also slow down, but underlined that it is a pain worth taking in the short term for long term gains.
Mahindra Group vice-chairman Anand Mahindra tweeted, "success required an element of surprise and its incredible that this master stroke was kept confidential."
In a lighter vein, he added: "Urgent message to anyone who robbed a bank tonight: You just got robbed..."Sajjan Jindal of JSW Group termed the move as an "amazing and very brave step to curb black money."
He also complimented Prime Minister Narendra Modi, who made the announcement on demonetisation of Rs 1,000 and Rs 500 notes in a televised address to the nation, for the bold step.
Nirmal Jain, chairman of leading NBFC IIFL, said the move "is a very powerful measure to curb black money. The Prime Minister has kept his promise of taking stern measures against black money. It was done some 30 years ago and since then a huge build up of unofficial money had happened. On the larger impact of the move, he said it will have deflationary impact in general and more specifically on real estate prices and make homes affordable. It is also indirectly a boon to honest tax payers.