On 8 November 2016, the government of India announced the demonetisation of all Rs. 500 and Rs. 1000 banknotes of the Mahatma Ganddhi Scries. Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency. The current form or forms of money is pulled from circulation and retired, often to be replaced with new notes or coins.
When the government made the decision, these notes accounted for 86% of the country’s circulating cash. With little warning, India’s Prime Minister Narendra Modi announced on Nov. 8 that those notes were worthless. The economy was cash dependent so there was chaos. The government stressed for cashless society. A cashless society describes an economic state whereby financial transactions are not conducted with money in the form of physical bankotes or coins, but rather through the transfer of digital information (Usually an electronic representation of money) between the transacting parties. Cashless society is indeed the need of the hour.