Impact of Demonetisation On Delhi

The Impact of Demonetisation on Delhi (NCR) region bank customers in 2019
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Table of Contents
Introduction......................................................................................................................................5
Overview......................................................................................................................................5
Aim and objectives......................................................................................................................6
The significance of the study.......................................................................................................6
Research Questions......................................................................................................................7
Problem statement.......................................................................................................................7
Scope and delimitations...............................................................................................................8
Structure of the dissertation.........................................................................................................8
Literature review..............................................................................................................................9
Introduction..................................................................................................................................9
Concept of demonetisation........................................................................................................10
Demonetisation as a monetary policy........................................................................................11
Monetary policy.........................................................................................................................12
Types of monetary policies........................................................................................................13
Positive impact of demonetisation.............................................................................................15
Negative impact of demonetisation...........................................................................................16
Customer satisfaction.................................................................................................................17
Customers’ perception on digitization.......................................................................................18
CONCLUSION..............................................................................................................................20
Conceptual framework...............................................................................................................21
Figure 1: Conceptual framework...............................................................................................23
Research Methodology..................................................................................................................24
Introduction................................................................................................................................24
Research philosophy..................................................................................................................24
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Research Approach....................................................................................................................24
Research Design........................................................................................................................25
Data collection process..............................................................................................................26
Research Instrument..................................................................................................................26
Sampling technique...................................................................................................................27
Data Analysis.............................................................................................................................27
Ethical consideration.................................................................................................................28
Summary of research methodology...........................................................................................28
Research and Discussion...............................................................................................................29
Introduction................................................................................................................................29
Preliminary Survey....................................................................................................................29
Analysis of Survey Data............................................................................................................29
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Introduction
Overview
The research is associated with the event of demonetisation that took place in India in 2016. The
major focus of the research study will be on the impact of demonetisation on the bank customers
of Delhi NCR region. The event has impacted almost every person of the nation involving people
from different backgrounds, profession and region. The research work will analyse the impact on
the capital of the country and how it is affecting the daily lives of people even today in 2019.
The term demonetisation refers to the withdrawal of a coin, money, note or precious metal from
the use as a legal tender (Dutta, 2018). The initiative of demonetisation is generally taken by the
government of any country with the objective to achieve certain specific goals (Balaji and Balaji,
2017). In India, demonetisation was introduced on 8 November 2016. The government of India
announced the withdrawal of 500 and 1000 rupee notes from the circulation which significantly
impacted the economy of the country (Balaji and Balaji, 2017). The objectives of this step
included better tracking on the transactions that have and that would take place, cracking down
the suspicious transactions, findings the issues in the economy of the nation, the ability of the
income tax officers to track the depositors and tax compliance. Tackling corruption was also one
of the main objectives of this step. However, it was found that along with the benefits, the step
resulted in many disadvantages too. If all the demonetised currency gets deposited in the bank
then it can create a false impression that the exercise was a failure. A report from Reserve bank
of India (RBI) in 2018 showed that approximately 99.3 per cent or 15.30 lakh crore demonetised
money was deposited in the banking system (Economic Times, 2017). Thus, many people
viewed this step as less effective in achieving the stated objectives. Furthermore, some
remarkable changes have been in practice since the event. These changes include a surge in
digital transactions, more money inflow for mutual funds and insurance sector and an increase in
the deposit of income tax. An analysis is thus essential to evaluate whether the decision was
effective for the Indian economy or not. In the initial months, after the implementation of
demonetisation, common man faced significant difficulties and obstacles in their daily life.
Reduction in cash supply and less availability of cash resulted in an adverse impact on the
economy for a short period. The industrial production rate and GDP (Gross Domestic Product)
growth rate have also been reduced for some time.
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The economy after 1-2 years of taking the step of demonetisation again started to work normally
and things became easy for a common man (Dutta, 2018).
Aim and objectives

The aim of the research is to understand the impact of demonetisation on the bank customers of
Delhi (NCR) region in 2019.
The objectives of theresearch are as follows:
 To identify the positive impact if any of demonetisation on the bank customers who
reside in Delhi (NCR)
 To identify the negative impact if any of demonetisation on the bank customers who
reside in Delhi (NCR) region
 To identify whether customer satisfaction with banking services has increased or
decreased in Delhi, NCR after demonetisation
 To examine whether demonetisation has enhanced the customer’s perceived value about
digital banking in Delhi, NCR
The significance of the study

The impact of demonetisation in India is a popular topic and is discussed widely in many places
by many people. The presented study will be helpful to gain considerable insight into the impact
of this step in the Delhi NCR region. Delhi is the capital of India and it is the centre for all the
important decisions that take place in the country (Kohli and Ramakumar, 2018). It is still a
popular topic for discussion due to its widespread impact. The study will add to the treasure of
existing literature on this topic. Moreover, it will be helpful to introduce one more research for
the impact of demonetisation on the people of a specific location. Only limited of research has
been done for the selected topic and therefore, this work would be helpful to increase the number
of good research in this direction (Ramdurg and Bassavaraj, 2016). Various parties will get
benefit from the research work and these parties include bankers of Delhi, customers of Delhi,
market research agencies, decision-makers, international commentators and those parties which
take a keen interest in knowing the economic status of Delhi(Shukla and Bose, 2017).
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Research Questions
The study will include two types of research questions that will facilitate the study. These two
types of research questions are primary research questions and secondary research questions.
The research questions for the work are as follows:
What is the impact if any of demonetisation on the bank customers of Delhi (NCR) region in
2019?
 What is the positive impact of demonetisation on the bank customers who reside in Delhi
(NCR)?
 What is the negative impact of demonetisation on the bank customers who reside in Delhi
(NCR) region
 Whether customer satisfaction has increased or decreased in Delhi (NCR) after
demonetisation?
 Whether demonetisation has enhanced the customer’s perceived value about digital
banking in Delhi (NCR) or not?
Problem statement
Delhi is the capital of India and it plays a great role in determining the operations of the entire
country. The financial operations and economy of the entire country get affected whenever any
change occurs in the capital region. At the time of demonetisation, the people of the city wasted
their days standing in the queue and waiting for note exchange. Delhi NCR is considered among
those urban cities which have been worst hit by the impact of demonetisation (Dasgupta, 2016).
This city has seen the sharpest fall in demand and the transitions across various sectors like real
estate, retail and automobiles have also been affected (Kapoor, 2016). Thus, the hit of
demonetisation was felt at the highest degree in the capital region. Moreover, the dependency on
cash was also high in the city due to which it suffered adversely after the decision. It was the first
time that Delhi’s economic growth slowed down and the cause was demonetisation (Hindustan
Times, 2017). Thus, it is significant to choose the bank customers of Delhi (NCR) for the impact
of demonetisation. The life of the bank customers was affected significantly in the region due to
the lack of cash.
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Scope and delimitations
The scope of the work is limited to the impact of demonetisation on the bank customers of Delhi
(NCR). The impact that people observe in the current time will be analysed and the impact in the
next few months will also be evaluated. It will link back to the event that occurred in 2016 and
the impact that has been observed by people since then (Mohd, 2016). The study will also prove
to be helpful for other nations as they can analyse how the process has been conducted and what
are its after effects. Both positive and negative impact of the move will be determined and
analysed so that a comprehensive study can be accomplished.
Structure of the dissertation

The structure of the work is divided in such a manner that all the crucial topics can be covered
for the completion of the research. The entire work is divided into six chapters which will also
include various sub-headings. The very first chapter of the study is an introduction which will
involve background and significance of the study, problem statement, aims and objectives,
research questions and scope and delimitations. The second chapter is the literature review in
which the relevant literature that would be helpful to answer the research questions will be taken
into account. The themes of the literature review would involve the impact of demonetisation
after it has been introduced, influence on various sectors, the importance of demonetisation and
positive and negative impact on the bank customers of Delhi (NCR). The third chapter is the
conceptual framework which is seen as a part of the literature review. The fourth chapter is the
research methodology that would incorporate the research design, philosophy, research
approaches, data collection methods, sampling technique and ethical considerations for the work.
The fifth chapter is the presentation and analysis of the findings and the last chapter is the
conclusion and recommendations.
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Literature review
Introduction
The Literature review is also called a narrative review which is a scholarly article that includes
current knowledge on the existing topic and its associated themes (Hart, 2018). Further, it also
includes substantive findings, theoretical and methodological contribution. It includes the critical
evaluation, summary and description of the research papers that are taken into consideration.
It is a significant process to get more information for the selected topic. In the process of
conducting the literature review, the researcher looks into various books, journals, papers and
articles to retrieve the required information. Extensive research will be conducted so that the
most appropriate resources can be gathered and used for the purpose of finding the most relevant
information. It helps in identifying the gap that exists in the current scholarly resources. This gap
gives direction for new research that should be conducted to fulfil the existing gap. The main
purpose which is served by this procedure is to provide a justification for the research papers that
have been available for the selected topic. Moreover, a direction for the research will also be
acquired through this. It also provides a theoretical framework and research methodologies that
can be used for the new research.It will also include various keywords like demonetisation,
cashless, alternate transaction channel, economic growth, bankers, customers, common man,
technology, and digitisation and so on. These keywords will be helpful to organise the research
in a systematic manner and focus on the significant topics. The papers that will be selected in the
research work will not be more than 6 years old and they will be peer-reviewed. Data from
relevant websites and news articles can also be incorporated in the work if the information is
found to be useful. Furthermore, it will be ensured that the resources are relevant for the work
and they provide useful information to facilitate the work.
The themes include concept of demonetisation, demonetisation as monetary policy, monetary

policy and types of monetary policies. The themes will further incorporate the positive impact of
demonetisation, negative impact of demonetisation, customer satisfaction and customers’
perception on digitisation. In order to get relevant information on the selected topic and gain
considerable insights, extensive research will be done. The most relevant research papers will be
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extracted and data will be taken from them so that the answers to the research questions can be
obtained.
Concept of demonetisation
As suggested by Dasgupta (2016), demonetisation is the action in which the money of certain
denomination is stripped out of the circulation with some specific objectives as determined by
the government and financial body of the country. In India, demonetisation took place on 8
November 2016 by stripping out the currency notes of 500 and 1000 out of the legal tender
(Dasgupta, 2016). In exchange for the demonetised banknotes, the government announced the
issue of new 500 and 2000 rupee notes. It has been observed that after the demonetisation, the
government had issued new notes for other values as well. The value of these new notes is rupee
10, 50, 100, 200 and 500 (Dasgupta, 2016).
The impact of demonetisation is observed differently in different nations. Moreover, the extent
of the positive and negative impact on different nations is also different. When it comes to India,
the impact of this step is still in discussion and varying parties give varying opinion regarding the
positive and negative impact. Prolonged cash shortages were observed for weeks after the step
due to which significant negative impact was observed throughout the economy. The news also
showed that people used to stand in long queues for several days so as to exchange the
banknotes. Apart from that, several deaths and adverse impact on health were also observed
among the people.
Research provided by Kumar (2016), also describes the definition of demonetisation and why it
was introduced in modern India. This research work is similar to the above research work in
terms of the concept of demonetisation and associated terms. According to the author,
demonetisation refers to seizing currency of certain denomination out of the legal tender.
However, the research differs in terms of mentioning some more significant facts that link with
demonetisation in India. According to the author, it is the third time in modern India that
demonetisation has taken place. The government of India and prime minister of the country,
NarendraModi, pitched a message on the day of demonetisation which showed that money
laundering in the country needs to be tackled. Moreover, they also took a noteworthy step which
has been registered in the Indian history. This step involved seizing the 500 and 1000 rupee
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notes’ currency from the Indian economy and supplying new notes of 500 and 2000 rupee
afterwards. In this instance, demonetisation in the country has taken place through the issue of
notifications which are mentioned under subsection (2) of Section 26 of an act called the Reserve
Bank of India Act, 1934 (Kumar, 2016).Initially, the step received support from many people,
bankers and international commentators but then it was also criticized due to the poor planning
and unfair decisions. The paper also critiques the action of the government in terms of positive
and negative consequences (Kumar, 2016).
Demonetisation as a monetary policy

In the words of Ramakumar (2018), demonetisation is viewed as a monetary policy because the
decision to demonetise the notes was taken by the central government of the country. The
decision has directly affected the liquidity in the country because the cash flow in the nation was
impacted. Moreover, the policy was also aimed to increase digital transactions in the nation and
decrease cash transactions. Thus, the policy would help to improve the transmission mechanism.
Furthermore, the control of RBI (Reserve Bank of India) over cash flow and money supply
would also enhance. Thus, the policy has proved to be a significant tool in terms of monetary
policy in the country. It is less like fiscal policy and more like a monetary policy due to the
decision making authority and after-effects of the decision. The work is significant for the
literature because it provides relevant concepts for the theme of demonetisation as monetary
policy. It also throws light on the economic rationale of demonetisation.
According to Shah (2016), money is the lubricant of any economy and a shock to the money
supply in the nation can significantly disrupt the economy. The aim of the study is to understand
the monetary economic view of demonetisation. It is more focused upon the shock that has been
caused in India after the decision. In India, cashless transactions are the lowest in the world and
therefore, shrinking the money supply can adversely affect the life of the people (Shah 2016).
This monetary policy has negatively affected the money supply and transactions in the country.
It is more concerned about the negative impact and almost nothing is mentioned for the positive
results of this move. Concern was related to shrinking the cash supply in a country where most of
the transactions are done in cash and demonetisation resulted in 86 per cent decline in cash
supply in the economy (Shah 2016). A comparison is also made with the US monetary policy in
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the 20th century where faulty monetary policy led to a negative impact on the economy and
regression in different sectors (Shah 2016). Impact on the small and medium scale organizations
is more and it is difficult for them to survive the situation. The questions that are introduced by
the research include would the effect of demonetisation be long term and future economic
conditions get impacted. Moreover, it also questions the stability of the economy again in the
near future. The limitation of the research is observed in terms of more focus on negative impact
and almost no focus on the positive impact of demonetisation on the economy.
Ghosh et al. (2017) also studied the impact of demonetisation on the economic progress of the
country. The arguments of the author are similar to the arguments that are provided by Shah
2016. The paper also views demonetisation as a monetary tool which aimed to help the banking
sector and economy of the nation (Ghosh et al. 2017). However, the results were not as intended.
After implementation of demonetisation, the credibility of bank and confidence of people in the
banking system of the country was in question. The functioning of the banking system became
difficult and the economic progress of the country was stagnant for a certain period. The
monetary policy proved an obstacle for the economic growth and progress of the nation. The
paper is significant because it helped to analyse the impact of demonetisation as a monetary
policy in India (Ghosh et al. 2017).
Monetary policy
According to Borio (2014), monetary policy plays a great role in determining the economic
condition of a nation. The paper aims to identify the role of monetary policy in a nation.
Moreover, the risks are also identified that are associated with this context. The aim of the
monetary or fiscal policy is to ensure that balance remains maintained in the economy during the
boom and recession. Further, during the boom, tightening monetary policy helps to restrain the
build-up of financial imbalances in the country. It acts as a device to assess the balance of risk in
the country and the cost that occurs due to a new policy introduction. Further, the role of
monetary policy in the event of financial busts is also explained. Monetary policy is expected to
react aggressively during financial busts or recession so that the situation comes back on track.
The limitation of the work can be understood in terms of not explaining the concepts associated
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with demonetisation in an explicit manner. Thus, a need for an explicit paper that can elaborate
on the concepts is observed.
In contrast to the study of Borio (2014), the research of Bruno and Shin (2015) aim to identify
the role of banking sector in cross border transmission of monetary policy. Banks act as
intermediaries and the financing cost of banks is tied with policy rate which is decided by the
central bank. The extent of risk which should be taken by the banking sector is also decided by
the monetary policy. In the scenario of demonetization, a risk that must be taken by the bank is
also decided by the monetary policy. Demonetisation acted as the monetary policy which
facilitated the actions of the banks that should be performed by them. It also suggests that the
monetary policy and its impact on one nation also impact the global economy. In the era of
globalisation, various economies are interconnected and thus, changes in the monetary policy
have a significant impact on the nations that are tied with the economy of the home country
(Bruno and Shin 2015). It shows the limitation regarding the impact of demonetisation on global
liquidity conditions in different nations (Bruno and Shin 2015).
According to Mohan (2013), monetary policy in India is aimed to balance the money market and
interest rates in the country in such a manner that economic stability can be maintained.
Maintenance of price stability and achievement of higher growth are the goals of this policy and
they are achieved by implementing the tools of the monetary policy in an effective manner. The
tools that are used for the achievement of a particular purpose in the country involve open market
operations, statutory liquidity ratio and cash reserve ratio. This work is different from the above
two works because it throws light on the significant concepts of monetary policy that are
imperative to understand its effectiveness in the nation.
Types of monetary policies

According to Bordo and Landon-Lane (2013), monetary policy is of two types which are
expansionary monetary policy and contractionary monetary policy. In the expansionary
monetary policy, the money supply in the economic market is increased by the authorities. The
aim is to boost economic activities and increase the money supply. It is done by keeping the
interest low so that people, organizations and banks can borrow more money. A panel of 18
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OECD countries from 1920 to 2011 is used to understand the impact of loose monetary policy,
bank credit and low inflation rate on commodity prices, stock and housing (Bordo and Landon-
Lane 2013). It is found that when the interest rate is below the targeted interest rate, it possesses
a positive impact on the asset prices and the impact is observed more during the period when
asset prices grew quickly. The limitation of the study states that any structural model is not used
so conclusion about causality from these results cannot be drawn.
Contrasting arguments provided by Chodorow-Reich (2014) shows that monetary policy affects
the real economy by having an effect on financial institutions of the country. The results show
that unconventional monetary policy that was introduced in the winter of 2008-09 had a
significant positive impact on the banks and especially the life insurance companies (Chodorow-
Reich 2014). However, in 2013, there was a small positive or neutral effect on bankers and life
insurers (Chodorow-Reich 2014). Further, it is also found that tightening monetary policy has a
negative effect on banks and life insurance companies. Thus, the expansionary policy is more
fruitful for these sectors as compared to the contractionary policy. History also suggests that
tightening monetary policy in emerging economies can have a vulnerable impact and it also
imparts global effects. Thus, it can be concluded that demonetisation was a contractionary
monetary policy that had a vulnerable impact on both the national and global economy. The
research of Chodorow-Reich provides direction for further research to study the impact of
contractionary monetary policy on the bankers and insurers more clearly and effectively.
Mallick and Sousa (2013), supports and shows the impact of contractionary monetary policy on
the output an economy of the nation. It takes into account, BRICS (Brazil, Russia, India, China
and South Africa) nation and provides significant research findings. The findings of the paper
suggest that Contractionary monetary policy negatively impact the real output of the country.
Even when the financial markets are not well-developed in Brazil, Russia, India, China and
South Africa (BRICS), the introduction of such a policy can lead to macro-economic shocks.
Commodity price shocks are observed after such a policy which ultimately leads to a rise in
inflation. Further, the central bank also behaves aggressively to deal with the situation and
stabilize inflation in the nation. The work of Mallick and Sousa (2013) is significant to
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understand the impact of contractionary monetary policy on the economy of the nation and on
other countries.
Positive impact of demonetisation

Kotnal (2017), describes the positive impact of the initiative on the common man of Delhi. The
aim is to focus the impact on the economy of the area. The paper is important in the context
because Delhi is the capital of India and therefore, the impact on the economy needs to be
studied. The findings suggest that the move is hampering the economic growth of the country in
short-term but it will have a positive impact in the long-term (Kotnal 2017). The economy of the
nation will grow in long-term and that will also prove to be beneficial for the common man of
Delhi. The per-capital income of people will grow and thus, their economic status will also
improve. Economic growth of the region will bring economic growth of common man too and
new opportunities will also be opened. A question is put forward by Kotnal (2017) which says
why demonetisation was required at that point of time as the initiative could have been on hold
for some period.
Slightly different research by Kushwaha, Kumar and Abbas (2018), shows the impact of
demonetization on the customers on the basis of different sectors. The sectors which have faced
the severe impact of demonetisation include labour-intensive industries, media and
entertainment, hospitality and tourism, retail, automobile, luxury and agriculture. The positive
impacts were in terms of curb on black money, boost to economic growth, a check on hawala
racketeers, dealing with the counterfeit currency, curb on terror financing and boost to cashless
transactions. It is stated that in Delhi, almost 40 per cent transactions in real estate were
facilitated through black money but after this move, the flow of cash money in the sector has
reduced (Kushwaha, Kumar and Abbas 2018). Moreover, the rates of property and prices of land
will also reduce that would prove to be helpful for the common man in terms of purchasing the
property. Some negative impacts can be seen in terms of the liquidity crisis, loss of well-being,
decrease in GDP, adverse impact on the consumption behaviour and very less impact in dealing
with the issue of black money (Kushwaha, Kumar and Abbas 2018). The paper provides a
significant analysis for the broader impact of demonetisation on the bank customers of Delhi.
The papers of Kotnal (2017) and Kushwaha, Kumar and Abbas (2018) are more focused on the
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positive impact of demonetisation for Delhi region and therefore, they are imperative for the
research work.
Negative impact of demonetisation

Shah (2017), focuses on the impact of demonetisation, the effect of demonetisation on the
common people of Delhi, on the economy of the nation and on farmers and agriculture sector. It
is based on secondary data and the data has been collected from sources like newspapers,
articles, and internet and so on. Furthermore, graphs and pie charts are used to support the
analysis. The results show that the negative impacts of the move were more as compared to the
positive impact. 86 per cent of the currency was taken out from the circulation that resulted in the
killing of the market transactions (Shah 2017). Moreover, in the attempt to grab a few major
black money holders, corrupt people and unacceptable transactions, the government created
discomfort and distress for a large mass of people. People lost their jobs and impact was also
observed on the parallel economy. The government was not prepared in advance to deal with the
issues that have been observed after the move. If the government would have prepared for the
after-effects then the situation might have been different and the people would have been in less
trouble. Agriculture was also badly affected by this move. The gap that has been identified in the
research of Shah (2017) is the lack of data for the impact of demonetisation on urban people.
However, the results helped to analyse the impact of the move on the agriculture sector (Shah
2017).
Shukla and Bose (2017), claim demonetisation came with many after effects on the economy and
common people of the region. The study is similar to the work of Shah (2017); however, it
focuses on a broader aspect and collectively on different sectors. It is significant to take this
work into consideration due to its significance in representing the impact on a broader level. The
impact of demonetisation on common man is observed in terms of negative impact on
consumption, effect on the daily routine, decrease in income for short-term and health issues.
The positive impact is seen in terms of digitisation and people became more technology-driven
as they started to use wallets for digital wallets and other digital modes for transactions (Shukla
and Bose 2017). The limitation can be seen in terms of not analysing the impact on rural people
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and agriculture. Moreover, a clear description of the impact of demonetisation on the economy
and common people has also not been mentioned.
According to Dash (2017), demonetisation resulted in many pros and cons and the common man
was among the one who suffered utmost with the chaos. The effect was significant on the social
sector and the major sufferings were seen among the poor and common man of the region. The
salaried people faced more difficulties in withdrawing their salary due to cash deficits. The
marriages that were planned during the period of demonetisation faced many issues in execution
due to the unavailability of cash. Most of the hospitals refused to accept cash due to which the
patients who were admitted in the hospital faced many problems in the treatment (Dash 2017).
However, people also found that cashless transactions have increased which ultimately proved to
be helpful in the economic development of the nation. Some more positive impacts were also
observed with respect to the move. However, the negative impact was more focused on the
paper.
Customer satisfaction
In the words of Batra (2017), demonetisation has brought a tough phase for banks in the country.
The difficult and messy procedure in the banking system has also impacted customer satisfaction
level. Further, the competition in this industry has increased considerably due to which every
bank is in the race to provide the best services to the customers and maintain a higher customer
base. In the era of increased customer expectations and higher competition, it is imperative to
maintain customer satisfaction by satisfying their needs and demands. The findings of Batra
(2017) suggest that the customers of ICICI are more satisfied as compared to the customers of
SBI. The comparison is made on the basis of services of the bank, digital payment and digital
transactions and internet banking solutions. ICICI is one of the fastest growing private sector
banks of the country and it has made great achievements in providing significant online services
to the customers. However, it is also found that SBI is also making remarkable changes in its
services and is providing good online banking services. The limitation of the study can be
understood in terms of research on the customers of ICICI and SBI only. Other banks and the
satisfaction level of their customers are not taken into consideration is the limitation of the study
given by Batra (2017).
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A contrasting paper by Tripathi and Nanda (2017), studied how demonetisation has impacted the
customers and how does it impact their satisfaction level. It shows that initially when there was a
lack of liquidity and cash, the customers were aggravated. They were also unhappy with the
government's move. However, after some time, people realized the importance of the move and
they also accepted digital means of transaction (Tripathi and Nanda 2017). Now, people find it
easy to make digital transactions. Thus, the satisfaction level of the customers in Delhi NCR was
very low in the initial phase. However, now they have accepted the changes and thus, the
satisfaction level have increased. Now, people avoid cash dealings and prefer to use digital
money for different kinds of work. The findings suggest that such a harsh move by the
government was not as successful as it should but now, the resistance has decreased to a great
extent.
Shirley (2017), states that demonetisation was a flawed policy introduced by the Indian
government. It is said so because the policy failed to achieve the stated objectives. The economy
of the nation set back and small firms were negatively impacted. The findings suggest that
customers were largely unhappy with this move because they experienced huge financial losses
in their business (Shirley 2017). Further, lack of cash affected their daily lives too. The policy
was implemented without proper planning and without understanding the actual consequences.
Thus, the common man struggled significantly during the phase and many people even died with
this abrupt move (Shirley 2017). The arguments of Shirley (2017) are significant to be
considered in this study because it provides the impact of the move on the common man of the
region. Shirley (2017) helped in concluding the actual impact of the decision on the people and
the level of their satisfaction or dissatisfaction.
Customers’ perception on digitization

According to Singh and Rana (2017), every disruption comes with certain positive effects and
one such disruption that was observed in India is demonetisation. The initiative has facilitated
digital transactions in the nation and thus, the country is moving towards cashless transactions.
The move has created a significant opportunity for digital payments in the country and the digital
wallet companies have significantly utilized the opportunity to facilitate more positive results. A
sample of 150 respondents in Delhi NCR was taken and a structured survey questionnaire was
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used to understand the perception of the customers towards digitization (Singh and Rana 2017).
It was found that the perception of the customers was positive and thus, it resulted in faster
adoption of digital payment mode by the customers. Moreover, it is also observed that the
perception of customers did not differ on the grounds of gender, age, profession and annual
income (Mankar and Shekhar, 2018). The factor that had a significant impact on the perception
was the education level of the people. Increasing internet penetration and growth of smartphone
users are the factors that have contributed significantly in the adoption of digital payments in the
country.
In the words of Chawla and Joshi (2017), the trend of mobile banking has also increased
significantly in the region after demonetisation. Focus group discussions, online survey and
interviews were used to draw the findings (Chawla and Joshi 2017). A sample of 367 mobile
phone users was taken in this direction. Confirmatory factor analysis and other statistical tools
are used for analysis. The findings suggest that mobile users were classified into three segments
which are Technology Adoption (TA) leaders, ta laggards and ta followers. The attitude and
intention to use mobile banking significantly differed in all three segments (Chawla and Joshi
2017). Age was found to have a significant impact on mobile banking. Further, ta leaders were
more positive for using mobile banking as compared to the other two groups.The results of the
work have practical implications in terms of providing better knowledge of the customers to the
service providers and helping the banks to customize the services on the basis of customer
expectations (Chawla and Joshi 2017). The limitations show that the research was conducted on
people who were more educated, salaried and young in the urban area. So, the results may vary
for other people who are less educated, belongs to business class and are elder (Chawla and Joshi
2017).
Munjal (2017), sees digitization as the solution of demonetisation. After the introduction of
demonetisation, digital payments in the country have increased remarkably. The greatest
challenge in the country is associated with the adoption of the digital mode of transaction by
rural, less educated and business class people. However, due to the demand of time and pressure
of demonetisation, they have also shown a positive and favourable behaviour towards adopting
digital modes. Further, government has also increased promotion for smartphone-based
18
transactions. The results are effective enough to understand the policy implications of
demonetisation and its impact as digitisation (Munjal 2017).
CONCLUSION
It can be concluded from the findings of the research papers that demonetisation was one of the
most significant turnarounds for the Indian economy and it affected the lives of the common man
in a significant manner. The move came with stripping out the currency of 500 and 1000 out of
the legal tender in the nation. After some times, the government introduced new notes of 10, 50,
100, 200 and 500. The move created a lack of liquidity in the nation due to which the common
man was not in the state to have money in the form of cash. This thing affected the consumption,
expenditure, business and financial stability of the common man. Demonetisation is also
considered as a contractionary monetary policy. It is considered as a monetary policy because the
decision to demonetise the notes was taken by the central government of India. This policy
would facilitate better control of RBI over cash flow and money supply in the country. It is a
contractionary monetary policy because the cash supply was contracted in the economy after
demonetisation. An expansionary monetary policy enhances the flow of money in the economy,
however, demonetisation is opposite of this. The positive impact that are observed after
demonetisation include long-term benefit to the economy and to the common man. Further, the
per-capital income of people will grow, economic growth of the region will boost up and
adoption of digital modes of payment will also accelerate. Moreover, the rates of property and
prices of land will also reduce that would prove to be helpful for the common man in terms of
purchasing the property. Common men have become more technology friendly and cashless
transactions have also increased. People are now more comfortable for online, internet or mobile
banking as compared to before the implementation of demonetisation.
However, it is also observed that the negative impact of the move was more as compared to the
positive outcomes. The negative outcomes are of liquidity crisis, loss of well-being, decrease in
GDP, adverse impact on the consumption behaviour and very less impact in dealing with the
issue of black money. Further, the move was also very less effective in achieving its stated
objectives. Cash is the most important mode of doing the business transactions in the country and
19
stripping out the currency resulted in negative impact on the business transactions. Agriculture
was also badly affected by this move. The effect was significant on the social sector and the
major sufferings were seen among the poor and common man of the region. The salaried people
faced more difficulties in withdrawing their salary due to cash deficit. Customer satisfaction
level was low in the initial stage of introduction of the move but later it increased. However,
satisfaction is still not as expected because people suffered a lot from the move. Regarding
digitisation, people are now more technology friendly and they are open to adopting digital
modes of payment and digital banking. Positive perception for digital banking and digitisation
has been seen among the bank customers of Delhi NCR. The factor that had a significant impact
on the perception for digitisation is the education level of the people and technology friendliness.
Conceptual framework
The conceptual framework shows the findings of the research and presents them in the form of a
flow chart so that interpretation can become easier. It also includes dependent and independent
variables that have a relationship with one another. It acts as a blueprint for the research and set a
plan regarding how the entire research will be conducted. Further, the data analysis also becomes
easy after making a conceptual framework. Further, an exhaustive literature review will be
conducted followed by the conceptual framework, which will be based over the collected
research materials. The given framework shows the flow of the research. Further, the variables in
each of the given areas are described below.
Dependent variables:
Education level of the customers, profession, technology-friendliness, awareness and
understanding of financial policies are the dependent variables.
Independent variables:
Government policy, type of policies in bank and amount of cash deposited in bank are the
independent variables.
20
Customers’
Demonetisation Monetary policy perception on
digitization
Customer satisfaction
Positive and
negativeoutcomes
21
Figure 1: Conceptual framework
The conceptual framework shows that demonetisation took place in India as monetary policy. It
is considered as a monetary policy because the decision was taken by the Central Bank of the
country. It is a contractionary policy because the currency in the country was stripped out of
legal tender (Idris, 2017). This policy will facilitate better control of RBI (Reserve Bank of
India) over cash flow and money supply in the country. This policy has shown many positive and
negative outcomes (Tharoor 2016).
The negative outcomes involve liquidity crunch, disturbance in the normal life of common man,
standing in long queues for a few days and wasting productive time, adverse impact on the
businesses, a difference in consumption pattern and decline in the financial status of people.
Many people suffered from monetary losses and those losses have not been recovered till date.
Many people are still dissatisfied from the move even when the things are set on the normal
track. The dissatisfaction is in terms of the difficulties faced during that period, flawed policy,
improper planning, loss of many lives, occurrence of diseases to many people, loss in the
business and financial losses.
After analysing the positive and negative outcomes of the move, customer satisfaction level is
also studied (Gupta, 2017). It is considered to be an important area of study because though the
negative outcomes of demonetisation were more but the satisfaction level of the bank customers
can vary on the basis of various grounds. The analysis suggests that the satisfaction level of the
customers is also less regarding demonetisation. The customers show dissatisfaction with the
move due to the significant changes in their daily routine and certain adverse impacts. Further,
the perception for digitisation is quite positive among the bank customers. People found that
digitisation is beneficial for them and cashless transactions are easy and transparent (Kumar and
Kumar, 2016). The variables that impact the perception for digitisation are
education,understanding level of the bank customers regarding government policies and
technology friendliness.
The variables that did not affect the perception of bank customers include gender, age, profession
and annual income.
22
Research Methodology
Research methodology is a process which provide detail procedure of how the entire research
work will be conducted, which research design, approach, philosophy and sampling technique,
data collection method and which research instrument will be used. It also provides the overview
of the data analysis tool that will be used in research work (Walliman 2017).
Research philosophy
Research philosophy is the tool that helps to define the overall direction of the research work.
The key focus of this concept is on the data collection and analysis of the research work. It is a
belief which is concerned with all the factors of the research work such as data collection,
analysis, and findings. It is the base of the entire research and hence it must be in alignment with
the entire procedure. There are three kinds of research philosophies which are considered for
research work. The philosophies involve positivism, interpretivism and realism (Edson et al.
2017 ). Positivism philosophy will be used for this research work.
Justification for the selection of positivism philosophy

In order to fulfil the requirements of the research work, positivism philosophy is considered as
the most suitable and important one. The study will include quantitative data and thus, for
quantative data, positivism philosophy is considered to be the best one. The positivism
philosophy believes that specific knowledge and evidences are already stated and they can use in
the research work (Hughes and Sharrock 2016). When scientific quantitative methods are used in
the research, positivism is considered to be the most appropriate philosophy to select. It will
direct the entire work in a single direction which will prove to be useful to conduct research in an
effective manner. The positivism philosophy will be suitable for the research study as it help to
understand the impact of demonetisation on the bank customer of Delhi NCR.
Research Approach
The research approach is based on the research philosophy. The strategy of the research will
determine the data collection and develop the implementation strategy for information collection
and study part of research. The research approach is plan and procedure which include
assumption for more significant steps of the research work. It is divided into two broad
23
categories which include research approach for data collection and approach for data analysis.
Majorly three type of research approaches are used that are deductive and inductive. Inductive
approach is used when we exaggerate and explain the data from specific to general point of view
(Sekaran and Bougie 2016). While, deductive approach is useful when data is adapted from
general point of view to a specific point of view. The approach is selected on the basis of
research philosophy, the varieties of data collection and data analysis will followed more in the
research work. For this research, a deductive approach is useful and will be the most suitable
research approach. This approach is useful because the information will be taken from general
point of view to particular point of view as the deductive approach concern with deducting the
conclusion from the research objective.
Justification for choosing the deductive Approach

The topic of the research requirement is that research should take the data from large set of
individual and take specific suggestion from the data. The researcher will use quantative data
with the help of the questionnaire. Thus, the deductive approach will prove to be the most
effective approach for the research work (Walliman 2017). The particular analysis is done by
general information. The inductive approach is not useful for this type of research work because
this approach is beneficial when an analysis is done form the specific to general point of view
which will reverse the given objective requirement. The inductive approach is not helpful to
understand the impact of the demonetisation on the bank customer of Delhi NCR.
Research Design
Research design involves a set of processes and methods that are suitable in data collection and
analysis. It is used to measure a variable that is mentioned in the research problem. Thus, it can
be said that research design is the outline of approaches and techniques that are significant to
combine several elements of research in a logical method with the objective to work on the
research problem effectively and efficiently. The research design uses the specific methodology
for conducting the research (Mackey and Gass 2015). The list of research question can be
evaluated effectively with the help of research design that is chosen by the researcher. It
performs as a framework for market research that will direct in more stages. Therefore, the
research becomes easy with the support of research design. Most common research designs are
24
exploratory, descriptive, experimental or casual research. These research designs are more
classified on the basis of data. Hence, the research design can be taken as a vehicle which
requires philosophy or approach as fuel so as to run in the correct direction effectively. This
research work needs descriptive research design for data collection and analysis in the form of
survey questionnaire.
Justification for selecting Descriptive Design

This design is used to define situations and occurrence of any event. It does not determine the
cause and effect relationship and does not make accurate predictions. It the most suitable
research designs for the data collection and study of quantitative data as the features of the data
can easily understand by the descriptive research design (Mackey and Gass 2015). Moreover, the
data will be based on primary research so the design is appropriate for giving a insightful attitude
to the research work. A survey is a commonly used method of data collection in descriptive
design and the same method will be used in this analysis. To fulfil the research objective the
descriptive design will be more suitable as it helpful to understand the impact of demonetisation
on the bank customer of Delhi NCR.
Data collection process

The data collection process involves the collection of data through the primary data collection
method. In the primary data collection procedure, the primary data is gathered to conduct the
research. The data is new and the consistency of the research is more. Moreover, the data is
specific and modified according to the requirement of the research. The data collection method is
expensive and time consuming as compared to the secondary data collection process (Orkin
2014). The survey will be taken from the sample size of 100 bank customers who belongs to
Delhi NCR area. The questionnaire will be designed to conduct the survey and respondent will
be response to the questions that are given in the questionnaire. The respondent sample was
taken randomly, as the random selection is appropriate to avoid the chance of biasness in taking
the responses for the survey. The random sampling method is the suitable for the survey
questionnaire method of the data collection. The respondents give a response through electronic
mode. This medium is appropriate for the researcher to conduct a survey and collecting the data.
25
Moreover, it is appropriate for the respondents to take the survey whenever they feel convenient
according to their suitability and time.
Research Instrument
Research instrument has been designed in the research methodology to obtain relevant data over
which analysis is going to take place. There are mainly two types of research instrument used in
the primary data collection method that our survey and interview (Walliman 2017). A
questionnaire will be prepared for the survey so that the people views and opinions regarding
demonetisation can be understood properly. The questionnaire of the survey will be prepared in
well structure manner because later answer to the questions will be used for the analysis purpose.
Sampling technique
Sampling technique play the significant role in research methodology to evaluate the accuracy of
research. There is variety of technique to collect the sample in research work. Sampling
technique is divided into two parts that are probability sampling technique and non-probability
sampling method. Probability sampling is used when there is complete set of eligible people
from where the sample for the study has to be selected (Etikan et al. 2016). This shows that all
the eligible people will have the chance to choose for filing the survey. But it has been observed
that probability sampling method is very time consuming moreover it is very expensive with
respect to non-probability sampling. It has been observed that non probability sampling is
cheaper and convenient. Therefore in this research work, we will use non probability sampling
methods.
Justification of the sampling technique

Non-probability sampling will be used in this research work. There are five type of non-
probability samplings. These include convenience, quota, judgement, snowball and bias
sampling. In this research work, convenience sampling will be used because it is one of the easy
methods to choose the best participants of the sampling methods (Etikan et al. 2016). In this
sampling method, participants are selected on the basis of availability and willingness of the
participants to take part in the survey.
26
Data Analysis
The data collected from the survey will be analysed using the data analysis tool. These tools are
used to plan and manage the entire data that has been collected. There are various options to
analysis the data. The data analysis is a procedure used to define, condense, collect and evaluate
data. Data analysis is qualitative tool that statistically produce the result by gathering data
through survey (Taylor et al. 2015). The analysis is on-going process where the data is collected
and analyse data simultaneously. A qualitative approach is used to determine the analysis and
generate result from it. Data analyst use various tool like test hypotheses: discern patterns of
behaviour and different research questions. It has been observed that statistical package for social
science has been used to get more precise outputs. SPSS is done with the help of software to
enhance efficiency and reduce the number of risk (SPSS 2015). Data analysis is done to make
most efficient decisions in future based on the results. The data analysis tools involve regression
analysis, univariate regression analysis, and linear analysis (Meyers et al. 2016). These are the
best technique to determine the most accurate result and are significant to use best technique
depending upon the outcome of the study. It is very important for researcher to plan the entire
section carefully because the finding of the research totally depend on the how research work
has be carried out and what steps were used to originate outcome from the finding, To analyse
the outcome of survey we can include pie charts and graphs.
Ethical consideration
The data will be gathered from various sources thus it is important to determine and check the
reliability and validity of the data (Sekaranand Bougie 2016). It is important to maintain the
integrity of the data to get the best outcome from the survey. It has been experienced that many
times the surveyor reveals the confidential information of the respondents of the other people and
hinders the authenticity and credibility of the data. A correct strategy must be used to initiate the
data form any sort of susceptibilities. None of the participants will be forced to be part of the
survey. Data will be collected from those who are willing to participate in the survey. It is also
important to ensure the data in the research study has not been copied from any sources.. It is the
necessary to give equal respect to all the participants of the survey.
27
Summary of research methodology
It can be concluded from the above findings the research methodology plays the significant role
to develop the framework of entire process of research work. Research methodology is tool to
select and use the most suitable procedure to get useful information. It is used to check the
validity and reliability of data. Research framework is used to collect the data for decision
making process (Bryman& Bell, 2015). In this case, the positivism research philosophy will be
used to define the overall direction of the research. Meanwhile the research is about the impact
of demonization on bank customers in Delhi NCR thus a deductive approach will be sued. The
deductive approach will be useful to move information from general to specific. Primary data
collection is used to conduct the survey. The data collection will be based on the convenient
sampling method because it is easiest method to determine and collect the data from
questionnaires. Furthermore, the collected primary data will be analysed through SPSS tool. Few
ethical considerations will be undertaken while completing the entire research so that the
integrity and authenticity of the data can be maintained. It can be stated that the purpose of the
research methodology is to develop a structure for conducting survey for demonization.
Research and Discussion

Introduction
This part involves a preliminary survey and analysis of the data collected from this survey from
the 100 bank customers. The main purpose of this chapter to understand the findings and
originate a conclusion from the results generated with the help of same tool. In this case, graph
are used to understand the result of the entire study. It highlights some area which often gets
neglected in most of the previous researches. Ten significant questions were prepared for the
survey so that research aim and objective of the entire study can be clearly accomplished.
Preliminary Survey
In this survey, questionnaires were sent through the emails to 100 bank customers. Out of the
100 respondents, data were gathered to obtain results. The questionnaire was distributed to all
type of bank customers so to get fair judgement about the demonetization. The data generated
through the survey will be used for analysis purpose.
Analysis of Survey Data
Demographics
28
Age: 1) 20-35, 2) 35-50, 3) 50 and above
The data regarding age is collected in order to develop the broader understanding about the
demographic profile of the participants involved in the research. Though, the bar graph depicts
that in terms of age the population is evenly ascertained the outcome will not be biased due to the
uneven distributed of age of the respondents. For example, a young person will always find the
digital payment method easier in compare to lump sum cash. On the other hand, eldery person
will always talk in favour of cash payments. In this research work as the population is evenly
distributed so there is no chance of any feedback biased results. There are 33 people in the first
age group which ranges between 20 through 35, 32 people in the second age group which
comprise of people within 35 through 50 and 35 people in the third age group which incorporate
people of age 50 and above. This substantiates the equality and evenness within the age
distribution of the population.
Age
Cumulative
Frequency Percent Valid Percent Percent
Valid 1 33 33.0 33.0 33.0
2 32 32.0 32.0 65.0
3 35 35.0 35.0 100.0
Total 100 100.0 100.0
Table 1: Age Distribution of the Population
29
Figure 1: Age Distribution of the Population
Sex: 1) Male, 2) Female, 3) Prefer not to disclose
The sex profile of the people is usually obtained with the intention to create a proper idea about
the demographic feature of the population. The sex profile of the current population under
consideration is diverging in nature. It can be experienced that the number of people who are
unwilling to disclose their gender, this depicts their progressive mentality that they disregard
gender to be a metric in determining people’s perspective. Though it can be stated that the
gender profiling of the data set is mandatory for the purpose that if there is a rise of any
interesting findings on the basis of the gender of the population under consideration that would
be better.
Sex
Cumulative
Valid 1 25 25.0 25.0 25.0
2 29 29.0 29.0 54.0
3 46 46.0 46.0 100.0
Total 100 100.0 100.0
Table 2: Gender Distribution of the Population
30
Figure 2: Gender Distribution of the Population
Metrics for Measuring Impact
1) Do you agree that due to demonetization the efficiency of the banking system increased?
(Strongly agree) (Agree) (Neutral) (Disagree) (Strongly Disagree)
In the context of demonetisation different people different opinion.. In most of the cases people
suffered largely due to the lack of cash that happened right after the implementation of
demonetisation which does not possess the positive opinion about the activity. This question was
asked to inquire about whether the implementation of demonetisation has increased the
efficiency of the banking system or not. In the response to this question varied feedback has
been obtained. There are the large number of people have disagreed with this claim and there are
few people who have strongly disagreed that implementation of demonetisation have increased
banking efficiency. A brief review of literature has revealed the fact that people suffered
significantly standing in the long queues in banks during that period and the bank employees
were also under immense pressure. As a result of which it was taking more time than usual. This
has played a major part in developing a perception among people that the implementation of
demonetisation has in turn decreases the efficiency of the banking system.
Banking_Efficiency
31
Cumulative
Valid 1 20 20.0 20.0 20.0
2 16 16.0 16.0 36.0
3 16 16.0 16.0 52.0
4 29 29.0 29.0 81.0
5 19 19.0 19.0 100.0
Total 100 100.0 100.0
Table 3: Banking Efficiency
Figure 3: Banking Efficiency
2) Do you agree that after demonetization the accessibility to banking facilities have
increased? (Strongly Agree) (Agree) (Neutral) (Disagree) (Strongly Disagree)
Accessibility is a major issue for the customers. Customers can easily access the services
usually provided by the banks that would be key component in enhancing the customer’s
perceived value about the bank. Though, during the period of the enactment of
demonetization an important economic change were taking place as result of which the
banking system get slow down for time being and particular services like ATM
withdrawals were not available. Even after the three years of demonetization people face
same difficulties in most of the ATMs Rs 100 or 500 currencies remain unavailable. This
has affected the more number of people and significantly change their perceived value
32
about the banks. In response to these question 22 per cent of the respondents strongly
agreed that demonetization has increased the accessibility of the banking system. On the
other hand, 24 per cent of the total respondents stated that they strongly disagree with the
fact that demonetization has increased the accessibility of banking industry. This diverse
response can be explained as there is difference in experiences accrued by the different
people. Some of the people have not experienced any significant issues during the
demonetization on the other hand; some of the people have faced lack of cash in the
ATM or delayed services in banks.
Banking_Accessibility
Cumulative
Valid 1 22 22.0 22.0 22.0
2 18 18.0 18.0 40.0
3 16 16.0 16.0 56.0
4 20 20.0 20.0 76.0
5 24 24.0 24.0 100.0
Total 100 100.0 100.0
Table 4: Accessibility to Banking Facilities
33
Figure 4: Accessibility to Banking Facilities
3) Do you agree that demonetization can in turn increase the security involved in the Indian
banking system? (Strongly agree) (Agree) (Neutral) (Disagree) (Strongly Disagree)
Security in the banking system plays the important role. The occurrence of
demonetization has increased the use of the online banking and virtual wallet payment
applications like Paytm , PhonePe etc. But the security issues rises because the people
were not well aware about the process of using this application so in several instance they
have lost money in the process. Therefore, in such way people have developed the
understanding that the implementation of demonetization has increased the security risk
in the banking system. In response to this question 23 per cent of the respondent strongly
agreed with the fact that demonetization has increased the banking security, at the same
point of time 23 per cent of the respondent strongly disagreed with this fact. Therefore, it
can state that in the context of the impact of demonetization over the security of the
banking system as well as people are possessing differentiated opinions. Ad per the
finding of this question it is quite evident number of the people are possessing different
opinions about the impact of demonetization on security of the banking system.
34
Banking_Security
Cumulative
Valid 1 23 23.0 23.0 23.0
2 17 17.0 17.0 40.0
3 20 20.0 20.0 60.0
4 17 17.0 17.0 77.0
5 23 23.0 23.0 100.0
Total 100 100.0 100.0
Table 5: Security of the Banking System
Figure 5: Security of the Banking System

4) Do you agree that demonetization has made it difficult for conducting the operations by
the bank employees? (Strongly Agree) (Agree) (Neutral) (Disagree) (Strongly Disagree)
The implementation of the demonetisation has increased the work pressure of the employees.
Reviewing the newspaper articles and the other relevant sources it would become clear that
during that time a large number of people visited bank everyday as cash was not available in the
ATMs. In response to this question revealed that people are quite aware about the consequences
of such massive change in the economic system. A major proportion of the respondents agreed
with the fact that demonetisation has made it significantly difficult for the bank employees to
35
operate in a smooth and precise manner. On the other hand, few people strongly disagreed with
this claims. However, it can easily be stated that the state regulated banks suffered immense
pressure while private bank suffered less. This is because in comparison to the private banks the
state banks have more customers. Though, this operational inefficiency in the banks were for that
time period only and that was covered up very soon. In the context of any change
implementation it is quite evident that there will be certain resistance and overcoming the
resistance in the key to successful implementation of change.
Banking_Operations
Cumulative
Valid 1 16 16.0 16.0 16.0
2 26 26.0 26.0 42.0
3 19 19.0 19.0 61.0
4 17 17.0 17.0 78.0
5 22 22.0 22.0 100.0
Total 100 100.0 100.0
Table 6: Banking Operations Overview
Figure 6: Banking Operations Overview
36
5) Do you think demonetization has in turn made the process of banking more complex?
This question was aimed at identifying whether the customer think that demonetization
has increased the complexity of banking operation or not. In responses to this questions
the finding shows that 30 percent of the total population strongly disagreed and 13
percent somewhat disagreed. Therefore, it can be stated that a nominal understanding
among the people about the process of demonetization were present and they had realized
that the implementation of demonetization will not change the procedure of banking. Due
to the changes in the economic operations the banking industry is going through a change
which is resulting in some operations to get delayed. This finding is quite interesting. On
the other hand, 23 per cent and 16 per cent of the people strongly and just agrees with the
statement respectively pointing out that the demonetization has significantly made the
banking operation more complex. From an overall finding it can be stated that as more
people opined that banking has not become more complex because of demonetization it
can be regarded as a major finding.
Banking_Complex
Cumulative
Valid 1 23 23.0 23.0 23.0
2 16 16.0 16.0 39.0
3 18 18.0 18.0 57.0
4 13 13.0 13.0 70.0
5 30 30.0 30.0 100.0
Total 100 100.0 100.0
Table 7: Banking Became Complex
37
Figure 7: Banking Became Complex
6) Do agree that demonetization has not been effective in reducing monetary fraud?
(Strongly Agree) (Agree) (Neutral) (Disagree) (Strongly Disagree)
The basic implementation of the demonetisation is to reduce the monetary forgery. Restricting
the uses of the old 500 and 1000 currency notes have decreased the money in the circulation.
Though, it is an arguable fact and economists as well as financial experts are still debating on the
benefits that have been derived from the implementation of this policy. In order to gain the basic
opinion of the bank customers about the effectiveness of demonetisation in reducing the
monetary fraud this question was designed. The outcome depicted that 27 per cent of the total
respondents strongly disagreed with the fact and they have stated that demonetisation has
significantly eradicated monetary corruption while the same has been opined by 24 per cent of
the total population who have just disagreed with the claim. Hence, it can be stated that people
are satisfied with the implementation of demonetisation has served the purpose for which it has
been designed. At the same point of time there are certain people who perceive that
demonetisation failed to eliminate monetary forgery from the economy. Hence, it can stated that
there are varied feedback in responses to this questions as the large number of people expresses
that demonetisation has in turn reduced the monetary forgery within the economy as a whole.
38
Red_MoneFraud
Cumulative
Valid 1 16 16.0 16.0 16.0
2 16 16.0 16.0 32.0
3 17 17.0 17.0 49.0
4 24 24.0 24.0 73.0
5 27 27.0 27.0 100.0
Total 100 100.0 100.0
Table 8: Demonetisation Reduced Monetary Fraud
Figure 8: Demonetisation Reduced Monetary Fraud

7) Do you agree that demonetization has been able to make a positive difference in the
banking industry?
It is quite obvious that after the initial impacts of the demonetization over the banking industry
the operation become smooth, however there are still some faults in the system. In response to
this question 24 per cent of the people out of the total population agreed with the fact that
demonetization has posed a positive difference in the banking industry, while the 25 per cent of
the total population just agreed with the same. In such situation it can be either is regarded as a
major success of the process of demonetization or it can be stated that this has improved the
customer’s perception about the banking industry. Therefore, positive impact of demonetization
has left the positive impact on the banking industry. Lesser number of the customers has opined
39
that they do not agree with this claim. Consulting the current publications and research papers
will also give sufficient data which will be enough to justify the aforesaid finding, that
demonetization has positively impacted over the banking industry. Moreover, it can also be
observed that the revenue as well as the customer base of the public and the private banks has
increased significantly after the demonetization. The use of the Paytm, PhonePe or other virtual
payment application has also enhanced the use of online banking.
Pos_Difference
Cumulative
Valid 1 24 24.0 24.0 24.0
2 25 25.0 25.0 49.0
3 19 19.0 19.0 68.0
4 14 14.0 14.0 82.0
5 18 18.0 18.0 100.0
Total 100 100.0 100.0
Table 9: Demonetisation Made Positive Difference to Banking
Figure 9: Demonetisation Made Positive Difference to Banking
40
8) Do you feel that demonetization has reduced the time that people used to spend in banks?
The banking time is measured by the average time spent by a customer in banks for
carrying out normal transactions or other related words in a week. Now the customers
were asked to roughly calculate whether their bank time reduced after demonetisation in
comparison to the bank time before demonetisation. The important outcome of this
question is that a majority of the participants strongly agreed that demonetisation has
decreased their banking time significantly. On the other hand, 22 per cent of the
respondent a just agreed with the fact that demonetisation has reduced the bank time. The
underpins the efficiency of the banking system where it is disclosed that as people are
now spending less time in comparison to that they used to spend before demonetisation it
is quite evident that the banking operation have become more efficient. This can also be
regarded as a major breakthrough made by the implementation of demonetisation.
Moreover, there are also participants who have disagreed with the claim. It can be stated
that there may be opposing experiences on the part of some of the respondents. So, it can
be stated that the demonetisation has sufficiently enhanced the banking system as a
whole.
Reducting_BankTime
Cumulative
Valid 1 25 25.0 25.0 25.0
2 22 22.0 22.0 47.0
3 22 22.0 22.0 69.0
4 11 11.0 11.0 80.0
5 20 20.0 20.0 100.0
Total 100 100.0 100.0
Table 10: Banking Time Reduced After Demonetisation
41
Figure 10: Banking Time Reduced After Demonetisation
9) Are you satisfied with the banking operations after demonetization? (Strongly agree)
(Agree) (Neutral) (Disagree) (Strongly Disagree)
The respondents were asked about whether they are satisfied with the overall operations
of the banks after demonetization. The most stunning outcome which can be experienced
in relation to this is that a large portion of the total population is not happy with the
overall banking performance after demonetization. After the implementation of
demonetization there are some changes in the banking systems which are taking time to
the customers to get familiar to it. As a result of which 26 per cent of the total population
stated that they are not satisfied with the banking services after demonetization. There are
also people who have stated that they are satisfied with the banking operations after
demonetization but the number are very low. It can be stated that the people are not
satisfied with the overall performance of the banks the banks should focus on this issue
and try to address this as soon as possible.
42
Satisfaction
Cumulative
Valid 1 19 19.0 19.0 19.0
2 19 19.0 19.0 38.0
3 17 17.0 17.0 55.0
4 19 19.0 19.0 74.0
5 26 26.0 26.0 100.0
Total 100 100.0 100.0
Table 11: Customer Satisfaction Level
Figure 11: Customer Satisfaction Level
43
Conclusion
It can be concluded from the above findings that demonetisation has made the major impact on
the Delhi NCR population. The research paper shows that demonetisation was one of the
important changes in Indian economy. It also influences the lives of common man in a
significant manner. The positive influence of demonetisation on the Delhi (NCR) population is
that it enhances the per capital income of the people and improve the economic growth of the
people. Demonetisation has control the money laundering system in India such as check on
hawala racketeers, dealing with the counter felt currency and increases the cashless transaction.
The negative impact of the demonetisation was more than the positive impact. The aim of
demonetisation was to grab the money laundering holders, unacceptable transactions and corrupt
people due to which 86 per cent of the currency was taken out of the circulation. Therefore, it
impacted on common people as some of them lost their jobs. It majorly impact the consumption
rate, daily routine of the people as well as it decreases the income for short duration. However,
the positive influence of the demonetisation is that people of Delhi (NCR) focused on the
technology driven applications as they started the use of digital wallets for the transaction of cash
such as Paytm, PhonePe etc. The demonetisation has brought the harder phase for the banks in
the country. The difficult process in the banking system strongly influenced customer
satisfaction level. Through the study it has been observed that competition in the banking
industry has been increased due to which every bank is trying to provide the excellent banking
services to customers and sustain the higher customer base. The study shows that when there
was lack of liquidity occur in the banking sector the bank customers become more serious and
they were unhappy with the government’s move. Though, after sometime the people get to know
the significance of the demonetisation and they all accepted the digital mode for the transaction.
During the it was observed that the satisfaction of the Delhi NCR customers was very low in the
starting phase of demonetisation but now they are comfortable with the change. However, the
large number of customer was not satisfied because they suffer from the huge financial losses in
their business. The shortage of cash impacted their daily lives. From the study of demonetisation
it has been observed that the policy was implemented without any proper planning and
understanding the actual consequences. In addition, the demonetisation initiated the digital
transaction due which the digital wallet companies use the opportunity to provide the positive
44
results. It was observed that the customer perception was positive and rapidly adopted the digital
transaction mode. Thus, the view of the customer does not differ on the ground of age, gender
and annual income. The element that influenced the perception of the customers was the
education level of the customers. The increased use of the internet and smartphone significantly
contributed towards the adoption of the digital wallets in the Delhi. After the demonetisation in
the Delhi region the trend of mobile banking also increased significantly but majorly those
people used the mobile banking that were educated, salaried and young. The Indian government
also promoted the use digital application for the transaction as it provide the effective result on
customer’s digital perception. The research shows that customer satisfaction level was
completely depend on the impact of demonetisation, monetary policy, customer’s perception on
digitalization and which provide positive and negative results.
To take out the result form the research work the research mythology has played the significant
role. This research has taken the survey of 100 bank customer to evaluate the impact of
demonetisation in Delhi NCR. The research has used the positivism research philosophy and
deductive approach for the research work. While primary method has been used for the data
collection and the SPSS is used for analysing the collected primary data. The analysis of the
collected survey determines the impact of demonetisation on the bank customers of Delhi NCR
region. Demonetisation impacted on the efficiency of the banking system after the
implementation of the demonetisation large numbers of people were standing in the long queues
of bank while the bank employees were in the intense pressure. Several people visited the bank
regularly which increased the pressure of bank employees as a result the banking process was
taking more time than usual. It shows that demonetisation has decreased the effectiveness of the
banking system. In general, the customers are easily able to access to services provided by the
banks which also improve the customer’s perceived value about the bank. Though, after the
implementation of the demonetisation some changes taken place in the economy that also slow
down the banking system and some services of bank such as cash was not available in the ATM.
Large number of people in Delhi NCR were not able to access the services of bank and faces
many issues like delay in bank service or shortage of cash in ATM. The security in the banking
system has a great significance. However, demonetisation has nothing to do with the security in
the banking system but the demonetisation has increased the use of online banking and digital
45
wallet payment applications such as Paytm etc. Due to which security issues has increased at that
time people were not well aware about the digital applications so in the several occasion they
have lost their money in the process. It was found that demonetisation has majorly impacted the
security of the banking system. The execution of demonetisation has increased the work
pressure of the bank employees as the large number of people visited the bank regularly because
the cash was not available at ATM. These consequences created the difficulty for the bank
employees to operate the banking system in the accurate and smooth manner. It was found that
state regulated bank suffered more than the private banks because the private bank has less
number of customer compare to public banks. Thus, the operational efficiency of the banks were
reducing during the demonetisation. Moreover, the demonetisation has increased the complexity
of the banking operation as the change in the economic operation changes the scenario of the
banking industry. The outcome of the complex banking operation is delay in the services. The
benefit of the demonetisation is that it reduces the monetary forgery. The government has banned
the use of the old 500 and 1000 currency note have decreases the money from circulation.
According to the bank customer the implementation of the demonetisation has reduced the
monetary forgery. The research shows that the large numbers of people were satisfied with the
demonetisation as it reduces the monetary fraud, control the money laundering etc. The
demonetisation has successfully made the positive difference in the banking system as well as it
improved the customers perception about the banking industry. The study shows that the revenue
and customer base has increased in the banking sector after the demonetisation. The usage of the
Paytm, Google Pay and other digital applications has significantly encouraged the use of the
online banking system. The analysis depict that the demonetisation adequately enhances the
banking system as after the demonetisation the banking time has reduced. The banking time can
be measured by the average time spent by the bank customer in banks for carrying out normal
transaction. Some people from Delhi (NCR) region have given the response that the bank time
has reduced after the demonetisation. The efficiency of the banking system shows that the Delhi
people are now consuming less time as they use to consume before the demonetisation. The
finding also provides evidence that banking operation have become more effective and efficient.
However, the banking customer of Delhi NCR region is not satisfied overall performance of
banking industry whereas the less number of people are satisfied with the banking operation after
46
the demonetisation. The dissatisfaction occurs among the bank customer because the
implementation of the demonetisation changes the various operation of the banking system.
47
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The Impact of Demonetisation on Delhi (NCR) region bank customers in 2019

Aim and objectives......................................................................................................................6

The significance of the study.......................................................................................................6

Scope and delimitations...............................................................................................................8

Structure of the dissertation.........................................................................................................8

Demonetisation as a monetary policy........................................................................................11

Types of monetary policies........................................................................................................13

Positive impact of demonetisation.............................................................................................15

Negative impact of demonetisation...........................................................................................16

Customers’ perception on digitization.......................................................................................18

Figure 1: Conceptual framework...............................................................................................23

Data collection process..............................................................................................................26

Summary of research methodology...........................................................................................28

Research and Discussion...............................................................................................................29

Analysis of Survey Data............................................................................................................29

Aim and objectives

The significance of the study

Structure of the dissertation

The themes include concept of demonetisation, demonetisation as monetary policy, monetary

Demonetisation as a monetary policy

Types of monetary policies

Positive impact of demonetisation

Negative impact of demonetisation

Customers’ perception on digitization

Justification for the selection of positivism philosophy

Justification for choosing the deductive Approach

Justification for selecting Descriptive Design

Data collection process

Justification of the sampling technique

Research and Discussion

Table 1: Age Distribution of the Population

Table 2: Gender Distribution of the Population

Table 3: Banking Efficiency

Figure 3: Banking Efficiency

Table 4: Accessibility to Banking Facilities

Table 5: Security of the Banking System

Figure 5: Security of the Banking System

Table 6: Banking Operations Overview

Figure 6: Banking Operations Overview

Table 7: Banking Became Complex

Table 8: Demonetisation Reduced Monetary Fraud

Figure 8: Demonetisation Reduced Monetary Fraud

Table 9: Demonetisation Made Positive Difference to Banking

Figure 9: Demonetisation Made Positive Difference to Banking

Table 10: Banking Time Reduced After Demonetisation

Table 11: Customer Satisfaction Level

Figure 11: Customer Satisfaction Level

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