No proposal to do away with cheque books, government clarifies
24 November 2017
Squashing reports about cheque books being the next casualty of Prime Minister Narendra Modi's push for digital transactions, the finance ministry on Thursday clarified that there was no proposal to end cheque payments (See: Modi govt may ban cheque books to push digital economy: report).
The fears were obviously far-fetched, as cheque payments are easy to track and are virtually indispensible for large payments in commercial transactions or where a strong paper trail is necessary, as in rent payments or payment for goods and services.
But the rumours emerged after secretary general of Confederation of All India Traders (CAIT) said on Wednesday that "in all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions".
"The Government of India has reaffirmed that there is NO proposal under consideration to withdraw the bank cheque book facility. It had appeared in a certain section of media that there is a possibility that the Central Government may withdraw bank cheque book facility in the near future, with an intent to encourage digital transactions. This has been denied by the Government and reaffirmed that there's no such proposal," said the Ministry of Finance in a tweet on Thursday.
After demonetisation, the government has been pushing digital transactions with an aim to move towards 'less cash' society. Digital wallets, quick response (QR) codes, near field communication (NFC) technology, sound wave systems, virtual cards, unified payment interface (UPI) and Aadhaar Pay have given a push to cashless transactions. However, more than 95 per cent of transactions still happen via cash and cheques.
Tallking to the reporters at the launch of 'Digital Rath', a joint initiative of the CAIT and Mastercard, Khandelwal had said the government needed to encourage the use of debit and credit cards. "The government spends Rs25,000 crore on the printing of currency notes and another Rs6,000 crore on their security and logistics.
''Moreover, banks charge 1 per cent on payments through debit and 2 per cent through credit cards. The government needs to incentivise this process by providing subsidy directly to the banks so these charges can be waived," Khandelwal said.