Which bank supported the demonetization in India?

Correct option is C

Correct Answer: (c) Reserve Bank of India

Explanation:
The Reserve Bank of India (RBI) supported and implemented the demonetization process in India, which was announced by the Government of India on 8th November 2016. During this move, the ₹500 and ₹1,000 currency notes were declared invalid as legal tender to curb black money, counterfeit currency, and corruption.

As the central bank, the RBI was responsible for managing the withdrawal of old currency and the issuance of new notes (₹500 and ₹2,000 denominations). The RBI played a pivotal role in overseeing the currency exchange process and ensuring the circulation of new notes in the economy.

Knowledge Booster:
● Demonetization aimed to transition India towards a cashless economy and reduce unaccounted wealth.
● The RBI introduced new ₹500 and ₹2,000 notes to replace the demonetized currency.
● The process faced challenges, including cash shortages and long queues at banks and ATMs.
● Demonetization significantly boosted the use of digital payment systems like UPI, e-wallets, and online banking.
● It also led to an increase in the number of taxpayers and greater compliance with financial regulations.

Additional Information:
● State Bank of India (Option a): Played a role in facilitating currency exchange during demonetization but did not manage the process.
● Bank of India (Option b): Assisted in implementing demonetization but was not directly responsible.
● Central Bank of India (Option d): A public sector bank, unrelated to the management of demonetization.