Money & Finance

Assessing the impact of demonetisation through the gender lens

  • Blog Post Date 04 January, 2017
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Mitali Nikore

PricewaterhouseCoopers India Pvt. Ltd.

In this article, Mitali Nikore, Senior Consultant at PwC India, highlights how demonetisation is impacting women differentially, and offers policy suggestions on how the negative effects can be mitigated.

Currency demonetisation is no doubt one of the boldest, yet most operationally onerous actions in the fight against black money undertaken in the recent history of India. As millions processed the shock of their cash holdings becoming devoid of any value on the morning of 9 November 2016, my thoughts went to the differential impact of this move on men and women. This article aims to point out some of the specific issues women may face as a consequence of this action, particularly due to lack of agency and access to formal banking, as well as certain specific recommendations for the government to ensure a successful transition, and move towards a cashless economy.

Differential impact of currency demonetisation on women

On the day after the announcement, several opinion polls, published in the news and social media showed that more than 90% of people surveyed supported the government’s action of currency demonetisation, popularly terming it a ‘surgical strike’ on the black economy, and applauding the secrecy and element of surprise associated with the announcement. However, stories of distress started in the days that followed, when people complained of long queues, dysfunctional ATMs, and differential access to the new currency. Stories of women in distress began circulating, with the All-India Democractic Women’s Association and the All-India Progressive Women’s Association decrying the Prime Minister’s actions as disastrous for women. Stepping away from the pandemonium – does currency demonetisation impact women differently? And if so, how? My answer: a definite and resounding yes, as shown through the five channels of impact below.

Figure 1. Five channels of impact of currency demonetisation on women


1. Consent: As per a UNDP (United Nations Development Programme) study, 80% of women in India don’t have bank accounts, as of 2014-15. Women (across socioeconomic groups) are often accompanied by male relatives who deal with banking officials to open a new bank account, make deposits, etc. on behalf of their female relatives. Documents carrying the name/signature of a father or a husband are often a requirement. Opening and operating accounts on mobile wallets requires mobile phones (preferably smartphones equipped with access to the internet) to begin with, which several women may not even own. Therefore, in essence, women require the consent of male relatives to access formal financial channels, whereas cash offers them a certain amount of independence.

2. Choice: Informal workers including domestic help, agricultural labourers, workers in factories, micro-business owners, daily-wage workers, etc. receiving their salary in cash are severely disadvantaged. They often lack formal documentation required for exchanging their currency notes, and also suffer from time poverty, as they may not be allowed to take leave to get their currency exchanged. This disadvantage is amplified for female informal workers, particularly sex workers, as they become vulnerable to abuse by employers. Given that these women bear the triple burden of household work, childcare as well as wage labour, they would find it difficult to stand in daily queues for currency exchanges. Consequently, they are likely to lose agency over their earnings if the exchange is handled by male relatives/employers. Overall, their choice over their time and earnings, when compared with men, has been further restricted as a result of demonetisation.

A predominantly male crowd queues for an ATM in Brahmapuri. Credit: Ganesh Dhamodkar CC BY 2.0

3. Challenge due to safety concerns: A casual observation of scenes outside ATMs makes it apparent that there are far fewer women in queues. A woman was recently met by astounded stares at an ATM in Delhi at just 9 pm, as she has committed the gross mistake of arriving there alone, without a male relative to chaperone. Women frequently do not risk going out alone late in the evening owing to the ever imminent threat of violence, be it cities or rural areas. This effectively reduces the time women have to access ATMs, thus making cash exchange far more challenging for women than men.

4. Cache of savings: Stories abound of huge caches of savings stashed in the form of cash by homemakers, away from the prying eyes of husbands and other family members. The perception that years of savings that housewives often put away from household expense budgets would be rendered valueless compounded with the need to disclose their quantum to the husband/family, severely impacts homemakers, even though they may be facing less scrutiny from the tax department. Further, for women who may be victims of physical, mental or emotional domestic abuse, cash is a safety net, having higher utility than even its monetary value. In these cases, women may be hesitant to disclose their savings, fearing abuse by husband/family members, and would end up facing greater insecurity in the future.

5. Constrained by physical barriers: Despite recent measures (such as dedicating a full day for currency exchange of senior citizens) the physical barriers preventing access to banks, further intensified by the misinformation that their lifelong savings may be lost, can have a debilitating psychological impact on elderly and disabled. Mobile wallets and net banking can be difficult to understand owing to technological barriers. This impact is compounded in women’s case, as they are generally used to their husbands/male relatives handling ‘money-related matters’.

How can this be remedied? Immediate and longer-term measures

While it is understood that demonetisation has been undertaken with a larger objective of eradicating the black money circulating in the form of cash, the differential impact on women necessitates that central and state governments, in partnership with NGOs, banks and mobile wallet operators, ensure a smooth exchange of currency for women in this period, as well as work towards improving women’s access to non-cash based payment methods in the longer run. Some of the possible steps which could be taken in both the short and longer term could be as follows:

1. Camps for encouraging women to open banks accounts: Urban local bodies/village panchayat bodies could tie-up with banks to set up Aadhaar card registration1 and Jan Dhan Yojana2 camps, wherein persons lacking formal documents can register for an Aadhaar card and set up a bank account under the Jan Dhan Yojana. This round of registrations could include specific targets to enlist women. Special female volunteers could be recruited at the community level to educate women about the need to have independent bank accounts, and be taught how to operate them without male family members. This can be a short-term measure, which could be implemented at the district level.

2. Currency-exchange services for women: Akin to the recent dedicated day for senior citizens, women could also be provided certain special currency-exchange services. Banks and post offices could set up separate queues for women; Resident Welfare Associations (RWA), community groups and village panchayats could partner with banks to set up women-only, physically accessible currency-exchange centres.

These could be set up on a single day of the week or on weekends, and women could be allowed to exchange an amount equivalent to the weekly withdrawal limit in one go at these centres. Volunteers could be selected by the RWA/village panchayat to help the elderly and disabled (men and women) with the cash exchange at these centres. Community-level checks could be in place to ensure that only the cash of the elderly is exchanged, rather than that of family members. Women lacking formal documentation could be allowed to exchange their cash at these centres by providing alternate documents, for instance, photocopies of Aadhaar card application. Finally, government-appointed/approved female workers, example, Anganwadi3 workers, could hold community-level events, and undertake carefully chosen door-to-door visits, to provide clarity on the currency-exchange rules and assure women that their savings would remain safe.

Figure 2. Systemic changes needed to ease women’s access to banks


3. Increasing use of mobile wallets amongst women: Studies have shown that mobile wallets (example, M-Pesa) have resulted in significant gains for women across Africa. They enable women to save securely, instead of living in the constant fear of it being stolen or misused by their male relatives. Further, their overall level of savings has been found to increase, as petty cash is not physically around for use. In addition, due to this money being part of a formal saving system, it can be used as collateral to raise loans to start small businesses.

Mobile wallet operators (MWOs) have already been marketing their services quite aggressively in the informal urban sector in India, with uptake seeing an increase in the past few weeks. To harness this momentum, MWOs could partner with NGOs, and microlenders to increase uptake amongst women, for example, microloans could be disbursed through wallets. However, to achieve greater success, MWOs would need to a) ensure that both the buyer and seller side has access to its services – which in turn entails greater number of exclusive partnerships at retail level, and b) facilitate SMS-based transactions on feature phones.

The government could also support this endeavour by mandating that sellers provide at least one other option to cash for transactions.

4. Ease access to banking for women: As shown in Figure 2, right from opening to making regular transactions, systemic changes are needed to ease women’s access to banks. Specific guidelines may need to be issued by the central government to sensitise bankers about not questioning women about male relatives. Further, banks could use the opportunity presented by the currency demonetisation to go to the doorstep of their potential female customers, and encourage more housewives, female informal workers and other segments of unbanked women to move into the formal banking system. In addition, they could also offer financial incentives, for instance, offering nominally higher interest rates for accounts held in women’s name, with central/state governments supporting through policy action.

5. Change attitudes amongst women: State governments, urban local bodies and village panchayats could forge long-term partnerships with NGOs to educate women on why they should, and how they can, make greater use of non-cash based payment methods, by working on changing mindsets and reducing attachment to physical cash.

In conclusion, it is incumbent upon the government to take note of women’s role in society, and their specific constraints, and address them through simple, practical steps to ensure they are not left out in this period of transition.

This article was originally published on the LSE South Asia Blog and reprinted on The IGC Blog.


  1. Aadhaar or Unique Identification number (UID) is a 12-digit individual identification number issued by the Unique Identification Authority of India (UIDAI) on behalf of the Government of India. It captures the biometric identity – 10 fingerprints, iris and photograph – of every resident, and serves as a proof of identity and address anywhere in India. 
  2. Pradhan Mantri Jan dhan Yojana (PMJDY) is the Indian government’s flagship financial inclusion scheme. It envisages universal access to banking facilities with at least one basic banking account for every household; financial literacy, access to credit insurance and pension facility.
  3. Anganwadi means ´courtyard shelter´ in Hindi. It refers to a government sponsored child-care and mother-care centre in India, catering to children in the 0-6 age group. Anganwadis were started by the Indian government in 1975 as part of the Integrated Child Development Services (ICDS) programme to combat child hunger and malnutrition. 
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