Demonetization is the act of stripping a currency unit of its status as legal tender . Demonetization is necessary whenever there is a change of national currency . The old unit of currency must be retired and replaced with a new currency unit .

 In 1978 when Janata Party was in power with Mr. Morarji Desai as Prime Minister demonetization of Rs. 1000 notes was declared by the Reserve Bank of India , people had to rush to RBI Bombay for exchanging the notes

You can see big crowd in the picture outside RBI headquarters at Bombay for exchanging the notes , there were serpentine queue for exchanging Rs.1000 notes , some people can be seen displaying the notes in the photograph .