Narendra Modi government's surprise move on November 8 to scrap Rs 500 and Rs 1,000 notes has posed some temporary trouble for consumers in a cash-dominant economy like India, putting 86 per cent of the currency out of circulation.
RBI Governor Urjit Patel later announced that Rs 4 lakh crore (19.1 billion notes) had been injected into the system. As on 24 March, currency in circulation was Rs 13.12 trillion, the reported added.
Even by a conservative estimate, there was a minimum of Rs 2.5 lakh crore excess cash before November 8, 2016 in financial transactions, it said.
The process of demonetisation has opened up huge potential for digital channels. PoS machines, m-wallets and mobile banking are the major available channels for digital transactions.
There has been an increase of 584 per cent in digital transactions done through the Unified Payments Interface (UPI) since demonetisation in November last year.
The government is also keen to increase transactions through digital payment methods to 25 billion this year to reduce black money and fight shadow economy.
News Source - Business Standard