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Indian Prime Minister Narendra Modi has announced that the existing 500 and 1,000 rupee banknotes will be withdrawn from the financial system overnight.

The surprise move is part of a crackdown on corruption and illegal cash holdings, he said in a nationwide address on television.

“Black money and corruption are the biggest obstacles in eradicating poverty,” he said.

New 500 and 2,000 rupee denomination notes will be issued to replace them.

The move is designed to lock out money that is unaccounted for and may have been acquired corruptly, or be being withheld from the tax authorities.

It is seen as the boldest move by any Indian government to clampdown on tax evaders.

Banks have been told to exchange existing high denomination rupee notes over the next 50 days.

The 500 and 1,000 rupees notes are extremely common in India.

Airports, railway stations and hospitals will accept the notes until 11 November.

People will be able to exchange their money at banks between 10 November and 30 December.

Mr Modi’s ruling Bharatiya Janata Party came into power in 2014 promising to bring billions of dollars of black market money into the country’s financial system.

The announcement comes just over a month after the government raised nearly $10bn through a tax amnesty for Indians to declare hidden income and assets. (Courtesy BBC)