Government mulling ways to promote use of credit cards

Moving to encourage the use of plastic rather than cash for major transactions and thereby curb black money, the finance ministry is moving to waive all bank charges on the use of debit or credit cards. 

At the same time, buyers may be obliged to use cards for purchases worth over Rs5,000.

At present, even honest taxpayers prefer to use cash rather than cards due to the considerable surcharge allowed by the Reserve Bank of India. Use of even the simplest debit card involves a surcharge of 3 per cent. Though rarely commented upon, this flies in the face of the government's attempts to curb the use of cash.

Finance secretary Rajiv Mehrishi told reporters in Delhi on Monday that the finance ministry will soon set up an expert panel to draw up a framework for switching over to a new system in a ''non-disruptive'' way.

''We are looking at incentivising banks, sharing part of the cost of point-of-sale machine, etc,'' finance Mehrishi said.