This paper examines the economic effects of withdrawing currency denominations, using India’s 2016 demonetisation and the Reserve Bank of India’s 2023 withdrawal of ₹2,000 banknotes as contrasting policy episodes. It distinguishes withdrawal of legal-tender status from a phased withdrawal in which notes remain legal tender during the transition. The paper uses a narrative review of Reserve Bank of India and Government of India documents and peer-reviewed empirical studies. Evidence indicates that the 2016 measure created a sharp cash and liquidity shock because the affected notes represented a large share of currency value. District-level research finds short-lived declines in employment, output and bank credit in areas more exposed to the shortage. The episode also accelerated some digital-payment use, although the extent to which it caused durable economy-wide formalisation cannot be inferred from payment growth alone. The 2023 exercise was materially different: the ₹2,000 note remained legal tender, the withdrawal was gradual, and the RBI reported that the large majority of the value in circulation had been returned by early 2025. The comparison suggests that economic outcomes depend on the scale and speed of withdrawal, replacement-currency readiness, access to payment alternatives and the distribution of cash dependence. The paper recommends explicit objectives, adequate transition arrangements, protection for cash-dependent groups and independent evaluation against measurable economic and inclusion indicators.