About Demonetization

2.  Currency is a generally accepted form of money,
including coins and paper notes, which is issued
by a government and circulated within an
economy.
 Used as a medium of exchange for goods and
services.
 Currency is the basis for trade.

3.  The Indian rupee (INR) is the
official currency of the Republic of India.
 The rupee is subdivided into 100
paise (singular paisa).
 The Reserve Bank of India manages currency
in India under the Reserve Bank of India Act,
1934.

4.  The rupee is named after the silver
coin, rupiya, first issued by Sultan Sher
Shah Suri in the 16th century and later
continued by the Mughal Empire.

6. 25th
Aug 2017
9th
Nov 2016

7.  In 15th
July 2010, a new symbol for Indian
rupee was officially adopted.
 It was derived from the combination of
the Devanagari consonant “ (ra) and
the Latin capital letter “R” without its vertical
bar (similar to the R rotunda).
 The parallel lines at the top (with white space
between them) are said to make a reference to
the tricolour Indian flag, and also depict an
equality sign that symbolizes the nation’s
desire to reduce economic disparity.
 The first series of coins with the new rupee
symbol started in circulation on 8 July 2011.

9.  Demonetization is the act of stripping a
currency unit of its status as legal tender.
 It occurs whenever there is a change of
national currency.

10.  The current form or forms of money is pulled from
circulation and retired, often to be replaced with new
notes or coins.
 Sometimes, a country completely replaces the old
currency with new currency.
 The opposite of demonetization is remonetization,
in which a form of payment is restored as legal
tender.

12.  The sudden move to demonetize Rs 500 and
Rs. 1,000 currency notes is not new.

13. Rs 1,000 and higher denomination notes were first
demonetized in January 1946 and again in January
1978. The highest denomination note ever
printed by the Reserve Bank of India was the Rs
10,000 note in 1938 but these notes were
demonetized in January 1946.

15. Rs 500 note came into circulation in
October 1987.
The Rs 1,000 note made a comeback
in November 2000.
The move was then justified as an
attempt to contain the volume of
banknotes in circulation due to
inflation.

16. There are multiple reasons why nations
demonetize their local units of currency:
 to combat inflation
 To combat corruption and crime (counterfeiting, tax
evasion)
 to discourage a cash-dependent economy
 to facilitate trade

18.  On 28 October 2016 the total banknotes in
circulation in India was Rs.17.77
trillion (US$260 billion).
 In terms of value, the annual report of
Reserve Bank of India (RBI) of 31 March 2016
stated that total bank notes in circulation
valued to Rs16.42 trillion (US$240 billion) of
which nearly 86% (around Rs 14.18
trillion (US$210 billion)) were Rs 500 and
Rs.1,000 banknotes.
 In terms of volume, the report stated that
24% (around 22.03 billion) of the total
90266 million banknotes were in circulation.

22. A cashless society describes an economic
state whereby financial transactions are not
conducted with money in the form of physical
banknotes or coins, but rather through the
transfer of digital information (usually an
electronic representation of money) between the
transacting parties.

26.  Cheque
 Demand Draft
 Online Transfer- NEFT or RTGS
 Credit Card or Debit Card
 E-Wallets (PayPal)
 Mobile Wallets (Paytm)
 UPI apps (Bank)
 Gift Card
 Aadhaar Enabled Payment System
 Unstructured Supplementary Service Data

28.  Convenience
 Discounts
 Tracking spends
 Budget discipline
 Lower risk (Stolen)
 Small gains (Reward Points)
 GO DIGITAL, GET DISCOUNTS

29.  Service tax : Waiver of service tax of 15% on
digital transactions up to `2,000.
 Fuel : 0.75% discount on digital purchase of fuel
through credit/debit cards, e-wallets or mobile
wallets.
 Rail tickets : 0.5% discount on monthly and
seasonal suburban railway tickets from 1
January 2017. Online rail ticket buyers get up to
`10 lakh free accident insurance too.

30.  Rail catering : 5% discount on digital payments
for railway catering, accommodation, retiring
rooms, etc.
 Highway toll : 10% discount on NH toll payment
via RFID or fast-tags in 2016-17.
 Insurance : 10% discount by government general
insurers on premium paid online via their portals.
8% discount on new LIC policies bought online
via its site. POS: Rs 100 a month is the maximum
rent that PSU banks can charge for PoS terminals.
 Rupay : Kisan credit card holders to get RuPay
Kisan cards.

31.  Higher risk of identity theft
 Losing phone
 Difficult for tech-unsavvy
 Overspending