What is demonetization? Explain its concept. please help immediately
Solution:-
Demonetization is the process of eliminating 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. Sometimes, a country completely replaces the old currency with new currency.
Example:- Prime Minister Narendra Modi declared in 2016 that the Reserve Bank of India would demonetize 500 and 1,000 rupee notes and replace them with new 500 and 2,000 rupee notes. This demonetization was an effort to combat the black market, fraud, and corruption as well as to encourage cashless transactions.
Demonetization is the process of eliminating 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. Sometimes, a country completely replaces the old currency with new currency.
Example:- Prime Minister Narendra Modi declared in 2016 that the Reserve Bank of India would demonetize 500 and 1,000 rupee notes and replace them with new 500 and 2,000 rupee notes. This demonetization was an effort to combat the black market, fraud, and corruption as well as to encourage cashless transactions.
