Master of Commerce (M.Com.) Demonetisation and Currency Management Syllabus - Mumbai University

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Syllabus for Demonetisation and Currency Management

Mandatory course · Semester 4 · M.Com. Banking and Finance · 4 credits · 100 marks

Module I: Demonetisation: Concepts, History, and Impact (2 CREDITS)

Unit 1 Understanding Demonetisation
1 Definition and Significance of Demonetisation
o Define demonetisation and its meaning in the context of monetary policy.
o Explain why governments use demonetisation as a tool (e.g., combating
corruption, black money, and counterfeit currency).
o Discuss the significance of demonetisation in influencing economic activities like
consumption, savings, and investments.
2 Historical Instances of Demonetisation in India and Globally
o Examine India’s experiences with demonetisation (e.g., 1946, 1978, and 2016).
o Explore global examples, such as demonetisation in the U.S. (1969), Zimbabwe, and the European transition to the Euro.
o Compare the goals, execution, and outcomes of these policies across different countries.
3 Objectives and Rationale Behind Demonetisation Policies
o Discuss the primary objectives of demonetisation, such as promoting digital
payments, removing counterfeit notes, and curbing tax evasion.
o Analyze the economic theories behind demonetisation, such as the velocity of money and the impact on money supply.
o Explore the political and social motivations behind demonetisation decisions.
Unit 2 Economic and Social Impacts of Demonetisation
1 Short-term and Long-term Impacts on the Economy
o Short-term effects: cash shortages, disruptions in supply chains, and impacts on GDP.
o Long-term effects: changes in savings and investment behavior, promotion of formal banking, and digital payment adoption.
o Use case studies and data to evaluate the immediate and enduring economic consequences.
2 Effects on Banking and Financial Systems
o Discuss the increase in deposits and liquidity in banks post-demonetisation.
o Analyze the role of financial institutions in facilitating remonetisation and transitioning to digital transactions.
o Evaluate the strain on ATMs, banks, and financial systems during demonetisation.
3 Social Consequences and Public Response to Demonetisation
o Examine the impact of demonetisation on various social groups, including small
businesses, rural populations, and daily wage earners.
o Discuss public reactions, including protests, acceptance, and adaptation.
o Use surveys and reports to illustrate how different societies have responded to demonetisation events.

Module II: Currency Management and Role of Central Banks (2 CREDITS)

Unit 3 Principles and Practices of Currency Management
1 Functions of Currency Management
o Explain the role of currency management in ensuring adequate and efficient
circulation of currency in the economy.
o Discuss the lifecycle of currency: design, issuance, circulation, and withdrawal.
Highlight the importance of maintaining confidence in the monetary system o
through effective currency management.
2 Role of Central Banks in Controlling Currency Supply
o Discuss how central banks (e.g., RBI, Federal Reserve, ECB) regulate currency
issuance and supply.
o Analyze tools like open market operations, CRR, and monetary policy to control liquidity.
o Explain how central banks ensure the availability of currency in remote and underserved areas.
3 Security Features and Counterfeit Currency Detection
o Educate on the security features embedded in banknotes, such as watermarks, holograms, and microprinting.
o Discuss the challenges of counterfeit currency and its economic implications.
o Introduce methods and technologies used in detecting counterfeit notes, including digital tools and apps.
Unit 4 Post-Demonetisation Challenges and Reforms
1 Challenges in Remonetisation and Liquidity Management
o Explore issues like cash shortages, ATM recalibration, and uneven distribution
of currency post-demonetisation.
o Discuss central bank strategies to manage liquidity and maintain economic
stability during remonetisation.
2 Digital Payment Systems as an Alternative to Cash
o Highlight the role of demonetisation in promoting digital payment systems like
UPI, mobile wallets, and online banking.
o Discuss the benefits and limitations of digital payments as substitutes for cash.
o Analyze the rise of FinTech and innovations in the payment ecosystem post- demonetisation.
3 Policy Reforms and Future Trends in Currency Management
o Discuss lessons learned from demonetisation and their influence on policy
reforms in currency management.
o Explore emerging trends, such as Central Bank Digital Currencies (CBDCs) and the move toward cashless economies.
o Debate the future of currency management in a digital-first world.

References

1 Reserve Bank of India Publications on Currency Management.
2 Bimal Jalan, "The Future of India: Politics, Economics, and Governance."
3 Urjit Patel, "Overdraft: Saving the Indian Saver."
4 Government reports and white papers on demonetisation.
5 Research papers and case studies on demonetisation and its impact.

Reproduced from the University of Mumbai syllabus for M.Com. (Banking & Finance) under NEP 2020, in force from the academic year 2023-24. Wording is as printed in that syllabus. Module numbering is as printed there too.

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