Vol. 4, Issue 1, Part D (2018)

Abstract
Demonetisation is an economic term which is used to mean the 'scrapping' of old currency notes and stripping them off their status of legal tender, usually when a new currency note or currency is introduced in the economy of the country. The decision scrapped the legal tender status of the high value currency notes of INR 500 and 1000 with immediate effect and introduced new Rs. 500 and Rs. 2000 notes. The immediate effect of the announcement saw countrymen lining up at the ATMs to withdraw 100 rupee notes to tide over the impending cash crunch. The primary aim of demonetisation is reasonable enough, the government hopes, to improve the functioning of the economy and boost its tax take by cracking down on the shadow economy. Demonetisation also increases use of electronic bank-based payment systems, which will make record-keeping easier more common, allowing government better to track and tax the proceeds. The government are taking all possible steps through commercial banks to overcome all the financial impediments. They also take steps to train more citizens towards the use of digital banking in the process of propagating cashless transactions.