Demonetization, a significant economic policy initiative, has sparked debates and investigations into its multifaceted impacts across various sectors. This study delves into the repercussions of demonetization specifically on the banking sector. By employing a mixed-methods approach, combining quantitative analysis and qualitative insights, this research comprehensively examines how demonetization has influenced the banking industry's dynamics, operations, and customer behavior. The study reveals nuanced consequences, including shifts in deposit patterns, changes in lending practices, alterations in digital banking adoption, and implications for financial inclusion efforts. Moreover, it investigates the role of regulatory responses and policy measures undertaken by banking institutions to navigate the challenges and capitalize on emerging opportunities post-demonetization. Through an exploration of both short-term disruptions and long-term structural transformations, this research contributes to a deeper understanding of the intricate interplay between demonetization and the banking sector, offering valuable insights for policymakers, industry stakeholders, and academic researchers. Keywords: Demonetization, Banking Sector, Economic Policy, Financial Inclusion, Regulatory Responses, Digital Banking, Customer Behavior, Lending Practices, India, Mixed-Methods Analysis.