What do you understand by the term Demonetisation which was recently in news in the context of India...........

Economic Affairs Money Supply and Monetary Policy

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What do you understand by the term 'Demonetisation' which was recently in news in the context of Indian economy?

Demonetisation is the action of an organization or government selling or liquidating an asset or subsidiary.

Banning of all cash transactions in an economy in order to control liquidity is known as Demonetisation.

Demonetisation is the act of stripping a currency unit of its status as legal tender.

Demonetisation refers to the act of mandating digital payment for all transactions above a certain limit.

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Explanation:

Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency: The current form or forms of money is pulled from circulation and retired, often to be replaced with new notes or coins. Sometimes, a country completely replaces the old currency with new currency.
There are multiple reasons why nations demonetize their local units of currency:
•   to combat inflation
•   to combat corruption and crime (counterfeiting, tax evasion)
•   to discourage a cash-dependent economy (big value notes could be demonetised to promote cashless transactions)
•   to facilitate trade (An example of demonetization for trade purposes occurred when the nations of the European Union officially began to use the euro as their everyday currencies in 2002. When the physical euro bills and coins were introduced, the old national currencies, such as the German mark, the French franc and the Italian lira were demonetized. However, these varied currencies remained convertible into Euros at fixed exchange rates for a while to assure a smooth transition.