• Manjula P

Banks are the financial backbone of a country. Banks play a crucial role in channelizing the money from the one who has capital to the one who needs capital. Considering a wider scale, banks pools small saving of individuals into a relatively larger investment under various industrial and agricultural sectors. In a developing country like India, it solves major problems the deficiency of capital formation and helps generate employment opportunities. By providing financial assistance to trade, industry, agriculture and individual customer activities it promotes new entrepreneurs. It thus aims at an overall balanced economic development. Demonetization is as act of replacing the current currency in the economy with a new one. It is the process of removing a currency from general circulation in a country. Demonetization helps fight inflation, corruption, remove counterfeit currency and discourage cash system. It is a massively serious economic phenomenon. If handled with proper plan and protocol, demonetization can bring down corruption and anti-national activity. To fight corruption, fake currency and undisclosed black money, the government of India announced demonetization of high denomination currency notes Rs 1000 and 500 on 8th November 2016. A new series of Rs 500 and fresh Rs 2000 bank notes were introduced to circulation from 10 November 2016. This decision by the government of India could be seen more as a surgical strike overnight that caused huge chaos in the lives of millions. The whole country had to go through a really tough time. Many lost their lives; many faced huge turn down in businesses and profits too, in a sense that the socio-economic lives were disturbed as a whole. On the other hand demonetization brought a load of challenges to the banks in addition to the ones already existing. Initially it disrupted the banks and stressed strongly to carry out bank operations and in long run helped the banks to pool the deposits without incurring of any cost. The cash flow in the banks, interest rates, money lending, online-banking and no. of account holders and various other parameters have changed dramatically which could play a crucial role in the future times of Indian economy. Initially post-demonetization management brought various ugly consequences and impact on the country’s economy. Many argue that the whole act of demonetization turned out to be waste. Many banking conditions haven’t reached back to the normal conditions which need still more time to settle back. There are both benefits and drawbacks regarding this movement that dramatically affected the Indian banking systems. This paper is a honest attempt to analyze various issues and parameters of Indian banking system affected due to demonetization both positive and negatively.

Demonetization, entrepreneurs, denomination, counterfeit currency, corruption.

"DEMONETIZATION- ISSUES AND CHALLENGES", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.5, Issue 10, page no.84-89, October-2018, Available :http://www.jetir.org/papers/JETIRG006011.pdf

"DEMONETIZATION- ISSUES AND CHALLENGES", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.5, Issue 10, page no. pp84-89, October-2018, Available at : http://www.jetir.org/papers/JETIRG006011.pdf