Question

Demonetization was implemented in which year?
1. 2014
2. 2015
3. 2016
4. 2017

Answer 1

Correct Answer - Option 3 : 2016

The correct answer is 2016.

• Demonetization was implemented in the year 2016.

• Demonetisation is a situation where the central bank of the country (RBI) withdraws the old currency notes of a certain denomination as an official mode of payment.
  • In 2016 Indian government decided to demonetize 500 and 1000 rupee notes the two biggest denominations in the currency system.
    • It constitutes 86% of the country's circulating cash.
  • Consequences: Eradicate counterfeit currency
    • Fight tax evasion 
    • Eliminate black money gained from money laundering and terrorist financing.
    • Promotes a cashless economy.
  • The earlier Indian government has demonetized banknotes on two occasions in 1946 and 1978.