Three Years Of Demonetization - RBI data shows that cash held by the public made up 96% of the money in circulation, with most of the rest deposited in banks. As of September 2019, the public held ₹20.49 lakh crore in cash. The total holding in cash constitutes more than the figure for the corresponding month of 2018.

In December 2016, one month after demonetization and the enforced deposits in banks, this percentage stood at 83%.


On the same day of 8 November 2016, the government has announced in its historic move to crunch high-denomination notes that constitutes 86% of the currency in the economy.

The exercise spread chaos in the cash-dominated informal economy breaking supply chains and crippling small businesses and big businesses in some or the other manner.

The Reserve Bank of India (RBI) issued over 60 circulars on the rules pertaining to cash/withdrawal and deposits in the following weeks. Confusion prevailed across different walks of life.

The motive of the crunch intended for the following objectives:

  • Curbing black money in the economy in the form of cash

  • Terminating cash-based corruption

  • Killing fake currency

  • Curbing terrorist activities

  • Pushing digital transactions

  • Widening the tax base

Are these targets achieved in the three years?

Curbing Black Money:

  • Various reports and analysis say that the note ban sought to terminate still remain on the ground.

  • Black money in the form of cash was only about 5 percent of the total stock, while the remaining was either in the form of real estate investments, gold or other assets. 

  • As per the Crime in India-2017 report put together by the National Crime Records Bureau (NCRB), fake currency notes worth Rs 28.1 crore were seized in 2017, which rose 76 percent from the previous year's mark of Rs 15.9 crore,

  • The report also says that the newly printed 2000 denomination note accounted for Rs 14.98 crore of the currency seized in 2017.

Corruption and terrorist activity: 

  • According to the reports, the cases of terrorist activities have increased in the years 2016, 2017, and 2018, as compared to 2015. 

  • South Asia Terrorism Portal (SATP) data shows that More about 728 people died in terrorist activities in 2015; The number of casualties rose to 905, 812, and 940 in such activities in 2016, 2017, and 2018.

What has changed in Digital Transactions?

  • The level of cash with the public has grown faster than the GDP growth of the country.

  • Digital payments also have been significantly risen (Mostly UPI Platform)

Status of Digital Payments:

  • The move has changed the payments system in India. People have now realized that digital payments are much more convenient, secure and much more seamless especially for online purchases.

  • As a result, the value of transactions made through the four most popular modes — UPI, debit cards, mobile banking, and prepaid instruments — has seen robust growth over this three-year period.

  • According to the RBI’s annual report, the number of UPI payments in 2018-19, at 535 crore, for the first time surpassed the number of debit card transactions (441 crore).

  • As of September 2019, there have been 496.5 crore UPI transactions in 2019-20 compared with 735.7 crore debit card transactions.

  • The RBI data shows that the value of transactions done using prepaid instruments such as e-wallets grew to ₹2.13 lakh crore in 2018-19 from ₹69,267 crore in the previous year. 

  • The current financial year seems to be on track to surpass even that, with ₹1.09 lakh crore worth of transactions have been completed in six months.

Know the Gap:

  • Online Transaction: In terms of value, ₹9.03 lakh crore worth of transactions were conducted on the UPI platform in the first six months of the financial year 2019-20. 

  • Cash Transaction: While this is still significantly lower than the ₹20.49 lakh crore worth of debit card transactions in this period, it still represents a huge catching up. 


  • RBI data estimated that Cash withdrawal and ATM withdrawals have increased.

  • In 2016-17, the year of demonetisation, the value of UPI transactions (₹6,947 crore) was only 0.25% of the value of debit card transactions.

  • To put the growth of UPI transactions in perspective, the first half of 2019-20 has already seen a higher value of transactions completed on the platform than in the entire year of 2018-19!