E-Payment System reforms and its impact on Currency in Circulation in India: Evaluation using Vector Autoregressive Model (VAR)

Abhay  Singh Chauhan; Navita  Nathani; Shiv  Kumar Singh; Nishant  Joshi

doi:10.21844/16202115105

Abhay Singh Chauhan Assistant Professor, School of Management Sciences (SMS), Varanasi, Uttar Pradesh, India
Navita Nathani Professor, Prestige Institute of Management and Research, Gwalior, Madhya Pradesh, India
Shiv Kumar Singh Professor & Dean, Faculty of Commerce, School of Commerce & Business Studies, Jiwaji University, Gwalior, Madhya Pradesh, India
Nishant Joshi Professor & Director, Prestige Institute of Management and Research, Gwalior, Madhya Pradesh, India

DOI: https://doi.org/10.21844/16202115105

Keywords: Electronic payments, Currency in Circulation,, Demonetization, Goods and Services Tax (GST)

Abstract

The present study contributes to the literature by investigating the impact of E-Payment System on Currency in circulation after facing three major reforms i.e., Demonetization of 500 and 1000 rupee note, implementation of GST and Current pandemic (Covid-19) situation. Results imply that with the increase in the volume of all the respective electronic payment systems the currency in circulation (in physical form) got minimized in the economy. Moreover, NEFTshows much higher influence on currency in circulation as compare to RTGS and IMPS but PPI’s shows the highest influence on currency in circulation from the selected E-Payment systems. Furthermore, Vector Autoregressive model suggests, RTGS, IMPS, NEFT, CARDS (POS), PPI’s, M-Banking are expected to increase whereas NACH
is expected to observe a downfall in the near future.