Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts

Reader 1

Professor William Lincoln


On 8th November, 2016, Prime Minister of India, Narendra Modi announced the demonetization of all 500 (approx. USD 7) and 1,000 (approx. USD 14) denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India. Overnight, 86% of the currency in circulation was cancelled in an economy where 80% of transactions are cash based. The goal behind this scheme was two-fold – to reduce corruption and black money in the Indian Economy, as well as to increase financial inclusion and create a more digitalized economy. In this paper, I look at the impact of this scheme on the digitization effects across the country. Using data from the Reserve Bank of India website – value and volume of ATM and Point of Sale transactions before, during and after demonetization – I use an Interrupted Time Series design to analyze impact. Relative to the pre-event trend, I find a significant increase in value and volume of point of sale transactions after the immediate announcement, and a significant decline in value and volume of ATM transactions for the same period.