The Demonetization in the year 2016 has played a key role in changing the manner how we spend our money. It has also revolutionized the banking services. This has been made possible because of a monumental change in the data tariff regime due to the entry of Jio in the telecommunication market....

We propose a dynamic theory of banking where deposits play the role of productive capital as in the classical Q-theory of investment for non-financial firms. A key conceptual innovation of our theory is that the stock of deposits cannot be perfectly controlled by the bank. Demand deposit...