How demonetization has impacted the online payment system?

Online Sales Sudden Go-Down: Demonetization makes sudden a big effect on online sales. Because Indian customer mostly believed in cash transactions, 90 \% of Indian online sales based on cash transaction. Demonetization affected 86\% currency of the country so people have very less cash for spending on online purchase.

What is the impact of Demonetisation on digitalisation?

Digital payment companies saw the huge usage of their market and also earned profit, as a result of demonetization, where after the ban of few notes people shifted promoting towards cashless transaction or economy, which was really hard in case of few people who were under the areas where there was no proper supply of …

What is the impact of demonetization on banking?

Increase in Deposits: demonetization has increased the deposits in Banks. Unaccounted money in the form of Rs. 500 and Rs. 1000 were flowing to the Banks and the sizes of deposits have been increased.

How was Demonetisation brought about in India?

On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. People seeking to exchange their banknotes had to stand in lengthy queues, and several deaths were linked to the rush to exchange cash.

How did demonetisation affect credit control?

Post demonetisation, several banks lowered their domestic term deposit rates and lending rates. The median term deposit rates of SCBs declined by 38 bps during November 2016-February 2017, while the weighted average term deposit rate of banks declined by 24 bps (up to January 2017).

What is the effect of demonetisation on savings and credit creation?

After banks, it’s the turn of credit bureaus to go into overdrive as the list of defaulters is likely to get longer because of demonetisation-induced cash crunch in the system. It is likely that many small borrowers and companies may default on their loan repayments, which in turn will affect their credit scores.

How much money came back after demonetization?

Did demonetisation achieve the target of killing black money? According to RBI data, almost the entire chunk of money (more than 99 percent) that was invalidated came back into the banking system. Of the notes worth Rs 15.41 lakh crore that were invalidated, notes worth Rs 15.31 lakh crore returned.

What will be the impact of demonetization on credit creation capacity on the commercial banks?

Ans: Demonetisation has led to huge deposits of cash in the commercial banks. Primary deposits of the banks have risen significantly. This enables them to keep higher CRR-deposits with the RBI. Accordingly, credit creation capacity of the commercial banks is expected to rise.