India withdraws 500 and 1,000 rupee notes in fight against graft, 'black money'

Modi says black money and corruption are the biggest obstacles in eradicating poverty

Indian Prime Minister Narendra Modi on Tuesday announced that 500 and 1,000 rupee banknotes would be withdrawn from the financial system at midnight, saying it was part of a crackdown on rampant corruption.

The surprise step appears to be designed to bring billions of dollars worth of cash in unaccounted wealth into the mainstream economy.

"Black money and corruption are the biggest obstacles in eradicating poverty," he said in an address to the nation.

New 500 and 2,000 rupee denomination notes will be issued later, he added.