question_answer

Demonetization in India led to the need for cashless economy. It had a great impact on banking industry. Banks were overflowing with old currency on the one hand and were in cash crisis for new currency. Gradually the problem smoothened but now a hawker and peddler is accepting paytm, mpesa and other forms of digital cash. Promotion of "mera mobile mera batuaa" concept motivated even the cobbler, hair cutters, vegetable and fruit vendors and other small service providers to accept digital cash and cashless forms. Popularity of plastic money (debit and credit cards) also increased.

(a) In the light of above facts, discuss the importance of banking in business and trade.

(b) How will demonetization create new aids to trade?

Answer:

Ans.     (a) Banking is very important for business and trade. It helps in transfer of funds in transactions. Modern means of transfer of funds include:

Debit cards

Credit cards

NEFT

Mobile banking

Digital cash

(b) Digital cash like Paytm, Mpesa etc are new aids to trade.