Demonetization means stripping a currency unit of its status as legal tender. It is necessary whenever there is a change of national currency. The old currency must be retired and replaced with a new one. This is the third time when the currency is being demonetized by respective Government on 8th November, 2016. Earlier it was done first time on 12th Januray, 1946 and second time on 16th January, 1978. The paper discusses its need and impact in the economic development not only in India but rest on rest of the world too. This move was targeted towards tackling black money, corruption, terrorism and promoting cashless society. The major impact t on Indian economic system was that consumption marked up to 56% of India’s GDP, which results in slow down of growth. However it has some positive impacts on E-Commerce and Fin-tech sector including online retails, electronic transfer providers, mobile wallets, payment banks etc.