New Delhi: After demonetisation and GST, Narendra Modi government is planning to drop another big bomb shell in financial terms. In a move to hush up digital transactions, the Centre is all set to ban all cheque books. The decision could affect the transaction preferences of millions of people in the country.
A news agency has quoted a senior official of a prominent trade body as sayig that the government needs to encourage the use of debit and credit cards.
Confederation of All India Traders (CAIT) Secretary General Praveen Khandelwal told this news agency. “In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions.” He was talking to reporters at the launch of ‘Digital Rath’, a joint initiative of the CAIT and Mastercard to encourage traders to adopt different modes of digital transactions and promote cashless economy.
“The government spends Rs 25,000 crore on printing of currency notes and another Rs 6,000 crore on their security and logistics. Moreover, banks charge 1 per cent on payments through debit card 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,” he said.
Khandelwal claimed only five per cent of the total 80 crore ATM-cum-debit cards are used for cashless transactions, while 95 per cent of them are used for cash withdrawals.
How will it effect?
The ban is most likely to affect the trading community as it relies heavily on cheque books. Over 95 per cent transactions occur through cash and cheques.
There is also a possibility that cheque transactions may have increased manifolds ever since demonetisation crippled cash transactions.