Demonetisation and Performance of Electronic Financial Service System of Banks in India

Abstract

There is a great interest among Indian policy makers, academicians and commercial enterprises to explore the possibility of moving towards a cashless economy in the country. Despite multiple electronic methods of payment being available, cash is still the preferred mode of payment in India. Banking industry in India has witnessed positive developments due to sweeping changes that are taking place in the information and communication technology. Electronic Financial Service System (EFSS) has emerged as result of this tremendous development. The objective of the research paper is to analyse the progress made by various banking and payment institution after the declaration demonetisation in India. The study is mainly secondary data based and also analytical in nature. The progress in EFSS is measured through various parameters such as growth in NEFT, RTGS, Mobile banking, card transaction etc. Different Statistical methods are used for the present study. The catalytic push from demonetisation hastened migration towards digital payments in November and December 2016. However, ease in availability of cash by progressive remonetisation impacted the pace of growth of digitalisation in February 2017.