Demonetization is a situation where the Central Bank of the country (Reserve Bank of India) withdraws the old currency notes of certain denomination as an official mode of payment. In 2016, the Indian government decided to demonetize the 500- and 1000- rupee notes, the two biggest denominations in its currency system; these notes accounted for 86% of the country’s circulating cash. With little warning, India's Prime Minister Narendra Modi announced to the citizenry on Nov. 8 that those notes were worthless, effective immediately – and they had until the end of the year to deposit or exchange them for newly introduced 2000 rupee and 500rupee. Banks are directed and organized for this work. Here the researcher has tried to study this Demonetization impact on the financial indicators of banks .Two public sector and two private sector banks are taken here with data of financial year 2016 and 2017.

KEYWORDS:  Demonetization, Public Sector Bank, Private Sector Bank.