Jaitley pushes banks to switch to cashless transactions

Union finance minister Arun Jaitley today held a video conferencing with banks calling for major push to cashless transactions through alternate banking channels such as NEFT, mobile wallets, pre-paid cards, QR codes, pay-roll cards, debit and credit cards and Unified Payments Interface (UPI) among others.

With banks facing the cash crunch, it is time to now focus on stepping up the push towards cashless transactions, Jaitley said.

The finance minister emphasised that physical currency must shrink while the economy should expand, shifting more and more focus to digital currency. He said that one of the major objectives of withdrawal of legal tender status on Rs500 and Rs1,000 notes was to move the Indian economy further towards digital transactions.

Jaitley was speaking while reviewing the latest status after withdrawl of legal tender nature of old Rs500 and Rs1,000 notes in a video conferencing with CMDs/CEOs of public and private sector banks today.

A series of decisions were taken during the meeting.

In this direction, most banks have already begun a promotional exercise by waiving-up to end-December MDR charges on debit cards. Banks will now be focusing on significantly stepping-up transactions in mission mode through alternate banking channels such as NEFT, mobile wallets, pre-paid cards, QR codes, pay-roll cards, debit and credit cards and Unified Payments Interface (UPI).

Apart from urban areas, banks will increase and sustain their focus on semi-urban and rural areas. This outreach would be backed up by an advertising campaign from Indian Bankers Association (IBA), including demonstration videos on how to use cards and other modes for cashless transactions.
 
As the rush at bank branches is now easing, banks will restart normal lending activities and in particular Mudra loans. These would help meet restocking requirements of enterprises by way of working capital delivered through Mudra cards.

Sowing season for Rabi and crops like potato is currently underway in many states. Necessary resources for the purpose have been provided by NABARD and daily releases to DCCBs (district co-operative banks) are a focus area of monitoring.

With these and other steps already underway, there is a clear path towards more digital transactions by all citizens. This will serve the larger objective of making banking activity easier and achieving the goal of financial inclusion that the government is committed to, Jaitley said.