After demonetisation of high valued notes last year to flush out all the black money and tackle corruption, which disrupted the economy of the country, the Centre, in its move towards ‘Digital Economy’ may soon ban cheques, media report suggest.
Mr Modi in 2016 banned the use of Rs 500 and Rs 1,000, which accounts to 86 percent of the cash in the circulation, to tackle the growing menace of black money but soon the goal post shifted to move cashless economy followed by digitisation.
In a move to meet the desired goal, the government is now in a mood to ban chequebooks. A senior official of the Confederation of All India Traders, Praveen Khandelwal told PTI recently that in all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions.
While speaking to the Digital Rath initiative, Khandelwal said, the government needs to incentivise payment through debit and credit cards. “The government spends Rs 25,000 crore on the printing of currency notes and another Rs 6,000 crore on their security and logistics. Moreover, banks charge 1 percent on payments through debt and 2 percent through credit cards. The government needs to incentivise this process by providing subsidy directly to the banks so these charges can be waived,” he said.
The move is believed to hit hard for traders as 95 percent of transactions are done via cheques and cash. Moreover, post demonetisation move the use of chequebooks has seen a steep hike.
Although digital transactions have surged post demonetisation, data shows that people still prefer to use cash more. Khandelwal said only 5 percent of the total 80-crore ATM-cum-debit cards are used for digital transactions, while 95 percent of them are used to withdraw cash.
According to Reserve Bank of India data, cash in circulation was Rs 17.9 lakh crore while that post demonetisation is Rs 16.3 lakh crore. Digital transactions rose 31 percent from November last year to September this year.