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1. We are on the way of vision and mission of a digital economy and it has widely been propagated
by the union government and other government agencies recently. Banking system is almost
digitalized. Commercial world highly demand digital system of transactions. Accelerated
monetary transactions are the result of digital transactions. Cashless economy is the new
proposal of globalized world with an intention to boost the dynamic state of the global
economy which has shown much progress. Modern economy survive on money mechanism
for which different versions are every now and then introduced by the monetary authorities.
In India Reserve Bank of India is vested with the Power of managing monetary affairs of the
nation. Accordingly our monetary policy is one chalked out by the Reserve Bank of India.
Digitalization in its absolute sense is a genuine concept. It is the recent demonetisation
that has made digitalization of monetary transactions inevitable in our country. Even the
layman had to open a bank account and are compelled to operate it in a digital mode.
Digitalization is a way of enhancing financial literacy among the people. India is one of the
countries having poor financial literacy. Banker is the dealer of money or in other words
it is the vendor of money. It borrows money just for the purpose of lending it again to
the people who are in need of credit. This state invites need for financial literacy. Financial
literacy means the ability to understand how money works in the world and the society.
Liquidity theory of economics states that higher the liquidity of money, higher is tendency for
expenditure. Digitalized money economy ensures maximum liquidity. The liquidity theory of
money decides the dynamic state of an economy. Higher the liquidity, higher is the volume
of transactions and higher is the dynamic state of economy. This dynamic state of the
economy is one of the criteria for the growth of the economy . The question is whether
the digitalization will increase the liquidity of money. If yes, how ? Liquidity of money is
witnessed by easy mode of transactions. If digitalization is going to increase the mode of
spending the money on a higher rate we may be sure that there is higher liquidity. This
increased liquidity will positively contribute for the economic growth of the country.
Digitalization is the latest method of banking transaction in a modern world from which no
country can abstain (100)
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