World Bank says that before demonetisation India relied on cash to a greater extent than other large emerging markets.
The World Bank says that the Demonetisation will have a positive impact in the long-term development of the country as it helps to rise the financial deepening, foster financial inclusion and increase transparency.
The ‘South Asia Economic Focus’ reports say that the main purpose of the note ban is to eliminate the corruption and the tax evasion and it is one of the typically demanding methods which involves the multiple measures over time.
It also added that the note ban of the scrapped Rs 500, Rs 1000 notes have an immediate cash crunch, hurting the county’s economic growth.
In November,8 2016 the administration has withdrawn the currency circulation of around 86 percent and replaced them with the new Rs 500, Rs 2000 notes which made the note ban a massive currency exchange and also encouraged to support the digital payments in the country.
To curb the black money demonetisation is one of the most prominent ways and it also eliminates the counterfeit notes and encourages the people to move towards the cash less economy.
The idea was a complete transformation from the cash economy to the digital payment method. World Bank says that between the November 2016 and January 2017 the usage of the credit and debit cards have raised from Rs 52,000 crore to Rs 82,000 crore. The transactions are depending on the prepaid instruments which include the mobile wallets. The coming moths will say whether the changes are here to stay or not.
Before note ban, India depended on the cash to a greater extent than any other country says, World Bank. But after the demonetisation, the innovative drive to link bank accounts, biometric identification cards, mobile phone numbers had taken the country to the high usage of the technological transformation, the reports said.
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In India, every adult has an Aadhaar Card, Mobile Phone, but no bank accounts even if they have the bank account they were in the inactive state.
The reports said, after the demonetisation each and every one has shown interest to open their own bank accounts.