Demonetization Essay for Students and Competitive Exams (Bimudrikaran or Notebandi), Demonetization Meaning

November 22, 2019

Essay on Demonetization for Students and Children

( Bimudrikaran or Notebandi)

Meaning of Demonetization

Demonetization is a process of invalidating the currency of a country by its Government. It means the demonetized currency will lose its legal tender value and that could not be used for the transaction in the future. Whenever there is a change in National Currency of any country Demonetization becomes necessary. The old unit of currency must be withdrawn from the economy and replaced with a new currency unit.

Objective of Demonetization

The objective behind demonetization of currency is to save the country from corruption, fake currency, black money, terrorism and hoarding of currency by the businessmen and politicians etc. It may also be used to reduce the cash flow in the economy and promote online transactions.

Effect of Demonetization on Economy (Pros and Cons)

By demonetization, all cash has to be deposited in the bank so the position of banks and economy improves positively. The practice of hoarding cash became less so it reduces the corruption as all the bribe and illegal transactions are being done in cash format. Demonetization also stops terrorism as terrorism mainly depends upon counterfeit currency.

Demonetization Essay for Students and Competitive Exams (Bimudrikaran or Notebandi)

Some negative effects of demonetization may also be seen in the economy. When a country demonetized any currency unit all the cash of that currency has to be deposited in the bank. Thus all people who have the same currency have to go bank for depositing the same. They have to stay hours for depositing the cash as there will be crowd to deposit the cash as even they have very few cash. The printing/paper cost of the new currency will be the new load in that economy and all the demonetized currency has to be destroyed.

For better experience of any country's economy and to annihilate the problems of fake currency like conditions, all the countries should demonetize all the big amounts currency from the economy after 20 to 30 years it will positively affect the economy by reducing the practice of corruption terrorism, fake currency, black money et.