The word demonetise means:

A) To reduce the value of a currency

B) To destroy a currency by shredding

C) To remove the status of legal tender of a currency and remove it from circulation

D) To stop the printing of currency and switch to e-payment

Answer: C) To remove the status of legal tender of a currency and remove it from circulation

Demonetise is an official act by a government or monetary authority that declares a coin or banknote no longer valid as legal tender. That means people cannot use those notes/coins for payments anymore and they are taken out of circulation.

Option A describes devaluation (reducing the currency’s value relative to others), not demonetisation.

Option B (physically destroying by shredding) might happen later, but shredding is the physical disposal step — it is not the definition of demonetisation itself.

Option D (stopping printing and switching to e-payments) is a policy choice and not the same as removing existing notes’ legal-tender status.

Example: when a government withdraws certain banknotes and requires holders to exchange them at banks because they are no longer legal tender, that action is demonetisation.