There is a lot of panic among people from across the country. They fear they might lose their money.
As banks and ATMs were closed on Wednesday, several office-goers were seen lining up shops and commercial establishments to exchange their high value notes for Rs 100 notes in Bengaluru.
In the process, they were being forced to pay a large amount of money.
For example if a person is giving one Rs 500 note to a hoarder, in return he is getting just four Rs 100 notes.
Thus the money hoarder is earning an extra Rs 100 in exchange for every Rs 500 note.
"There is so much of panic that people are readily giving away Rs 500 note in return for only four Rs 100 notes. We all need money. Till yesterday, most of the ATMs were giving away only Rs 500 and Rs 1,000 notes. Now, they have all become illegal. How will you function without money?" asked IT professional Devdutta Patnaik.
Speaking to OneIndia, Patnaik said that several shops in an around Outer Ring road and Electronic City in Bengaluru, where majority of the IT companies are located, were doing such illegal transactions.
A small-time shopkeeper in Marathahalli told this reporter that in a "crisis situation" people were approaching shopkeepers and moneylenders.
"We're just doing our business and people need our help. There is nothing wrong in it," he said, refusing to divulge his identity.