Several churches in Ernakulum and Kottayam districts in southern Kerala, a Christian stronghold, showed a dip of up to 40 percent in Sunday collections after the government's surprise announcement.
Cash dried up in India after the government withdrew 1,000 and 500 rupee notes in an apparent move to starve the black market and criminals with large stashes of cash.
People were able to exchange their now useless notes at banks but the government has put a cap on daily and weekly withdrawals, seriously affecting people's cash flow.
Sunday collection is down to a mere 3,000 rupees (US$44), a drop of about 40 percent, at St. Francis Assisi Church in Kakkanad, on the outskirts of Kerala's commercial capital, Kochi.
Father Jose Thottakkara said the parish of 450 families will struggle to cope with with the drop in funds.
"The lack of small denomination notes was the major reason for the drop in the collection," said Johnny Thekkakara, a trustee of St. Sebastian Church in Changanacherry Archdiocese.
People do not want to part with smaller currency when larger notes are scarce, he added.
Parishes in Goa, another Catholic stronghold are facing double trouble as state tax collectors have become suspicious after some priests started exchanging money to help their parishioners.
"For you and me this may be a Good Samaritan act but officials may raise queries," Father Valeriano Vaz, procurator of Goa Archdiocese, told ucanews.com
"A small time hotelier came to us and requested change to pay his staff. We obliged him. We help those in need in whatever way possible," said Father Cipriano D'Silva, parish priest of St. Alex Church, Calangute.
He also said Sunday collections have dropped by almost 50 percent. "On average, we get 70,000 rupees on Sunday but after the withdrawal we collected only 48,000," he said.
Collections have dropped in Bhopal in central India too. Seva Sadan Parish in the city used to collect some 1,500 rupees but that has been reduced by a third, said Father Thomas Panackal.
However, there are areas where churches have been unaffected.
The Delhi Archdiocese in the national capital has not reported any big impact on Sunday collections, according to spokesperson, Father Savari Muthu. "So far no parish has reported any remarkable difference," he said.
Bishop Anthony Chirayath of Sagar in the western state of Madhya Pradesh told ucanews.com that "scrapping high denomination notes in the country does not have any serious impact on the running of the diocese and its institutions."
"Our diocese is in a rural area and people lead very ordinary lives with little money. Our Sunday collection was not affected as nobody would ever offer the scrapped high denomination notes," he added.
Father Rocky Shah, public relations officer of Jhabua Diocese in Madhya Pradesh, told ucanews.com that the diocese observed Mission Sunday after the de-monitization. "People offered high denomination notes which they normally do not do," he said.
However, people are finding it hard to put up with the withdrawal of the denominations and it will take some time to recover, he added.
The move has not affected the church in the northern state of Jammu and Kashmir. Christians make up a tiny minority there and are mostly too poor to worry about large notes.
"Our collections are a bare minimum and we hardly get any high value currency. Therefore, the move has not affected the church here at all," said Father Shaiju Chacko, director of diocesan social services organization in Jammu-Srinagar Diocese in the state.
In a nationally televised speech on Nov. 8 Prime Minister Narendra Modi said that from midnight 1,000 and 500 denomination bank notes would cease to be legal tender. The move wiped out 86 percent of the country's currency overnight. However, people would still be able to change limited amounts of such notes for lower denominations at banks till the end of the year.