Explanation

In monetary economics, the narrow aggregate money supply (M1) is formulated as the sum of currency held by the public and demand deposits held with commercial banks:

– Money Supply (M1) = Currency with the Public (C) + Demand Deposits with Banks (DD) + Other Deposits with RBI (OD).
– When an individual withdraws Rs 1,00,000 in physical cash from their bank savings/current account, the Demand Deposits (DD) decrease by Rs 1,00,000 while the Currency with the Public (C) increases by the exact same Rs 1,00,000.
– Because this transaction represents a mere reallocation of funds between the two constituent components of M1, the total sum remains constant.

Therefore, the immediate effect on aggregate money supply is to leave it unchanged — Option D.