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Demonetisation and its Impact on Digitisation in India
The purpose of the study is to explore the impact of demonetization on digitization in India. On 8th Nov. 2016, Indian Government announced Demonetization by abolishing INR.500 and INR.1000 currency notes in the country with an objective to move towards a cashless economy besides check on black money and other corrective measures. In the short run, it led to temporary derailment of economy and inconvenience to general public. After initial teething problems like severe cash shortage, there was a steady growth in digital transactions when people have adopted to different digital payment modes like Online / Internet banking, ATM facilities, mobile wallets, usage of debit/credit cards and mobile banking, etc. The authors have taken secondary data from the RBI website from March 2015 to July 2018 to analyze the impact of demonetization on digitization. An event window of 20 months predemonetization and 20 months post-demonetization was taken for analysis. The month the event took place i.e., November 2016 was taken as month ‘0’. Descriptive Statistics, Correlation, t-test, and Trend Analysis were carried out to analyze the data. Based on the results extracted, the authors have concluded that there is a significant increase in the usage of various digital payment methods like RTGS, Retail Electronic Clearing, Prepaid instruments in the post demonetization period with a few exceptions like Paper Clearing, Mobile Banking and Debit cards.
Demonetization, Indian Banks, Cashless Economy, Digitization.
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