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The IUP Journal of Bank Management
Progress in Digital Banking After Demonetization: Some Evidence.
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This paper aims to demonstrate the optimization of digital banking after demonetization of a series of currency notes denominated in 500 and 1,000 in India. The government initiated the demonetization process on November 8, 2016. India is a developing country and Indian banks have been offering digital banking service to its customers since 2008, but it is also a fact that the frequency to optimize this service was very limited and customers were not availing this service. Mostly, customers from metro and urban cities used the digital banking option for transactions. After demonetization, the customers have started to optimize this service due to less transaction time, easy to operate at any time at any place and for proper record of all the transactions digitally. This study examines whether there is any significant change in the utilization of digital banking services in India post demonetization. This is a descriptive study and the data for research has been taken from November 2015 to October 2017, i.e., one year before demonetization and one year after demonetization, and paired sample t-test has been used for analysis.

 
 
 

Digital banking is the transformation of physical banking wherein customers have to be present in bank branch for banking transactions like checking account balance, funds transfer, etc. Digital banking has helped the customers to save their time and other resources and now customers need not go to the bank branch for banking services. Customers can perform various banking services with the help of internet at any time at any place. India is now moving at a faster pace for a cashless future after November 8, 2016 when the Indian government demonetized the specific currency notes denominated in 500 and 1,000 from circulation. It is not the first time in India when demonetization decision was taken. Prior to 2016, the last demonetization was done in 1978 when bank was the only medium for all kind of transactions. Then the Government of India demonetized the currency notes of 2,000, 5,000 and 10,000 to solve the issue of black money, which was a major concern at that time, and the government had given one week time period for the exchange of currency. Digital banking played a prominent role in the success of demonetization. Now customers have switched from cash transactions to cashless transactions. After the extreme success of demonetization, the Government of India has started focusing on the usage of digital banking service and has set a target of 25 billion digital transactions during the financial year 2018.

 
 
 
Bank Management Journal,Progress in Digital Banking After Demonetization,Digital Banking Option for Transactions,Some Evidence.