Centre May Withdraw Cheque Facility To Push Digital Transactions

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Confederation of All India Traders (CAIT) secretary general Praveen Khandelwal said the government needs to encourage use of debit and credit cards.

In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions

Why this step?

  • 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.”
  • Khandelwal said only 5 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.

Way ahead?

  • Aurora said ‘Digital Rath’ would further strengthen the nationwide movement of ‘Cashless Bano India” in line with the government’s vision of digital India.
  • “We believe small traders and merchants are an important constituency to help India transform into a knowledge economy.
  •  Mastercard has invested about USD 500 million in India during the past couple of years and it plans to pump in another USD 700-800 million.

What is cashless?

Cashless economy or cashless means all the transactions carried out between two individuals will occur by payment through payment gateways or through the plastic money. It is done with the primary aim of uncovering the non-registered transactions.

The Indian government with another aim to promote the economy through non-cash transactions has introduced mediums such as: Banking cards, USSD, AEPS, UPI, Mobile Wallets, Banks Pre-Paid Cards, Point of Sale, Internet Banking, Mobile Banking, Micro ATM’s

Need of cashless India

  • A cashless economy is required to make the transactions more convenient for the layman rather than carrying the bulk of cash in the wallet along with plastic money.
  • Cashless economy is needed to reduce the taxes that are charged by the government due to the lack of funds in the government bodies
  • Cashless India is important because it will decrease the tax avoidance and the money laundering cases subsequently resulting in the benefits for the customers

Future Scope

  • The transparency in the economy will increase through the e-commerce transactions and the digital payment gateways which will increase the GDP of the economy.
  • This will increase the creditability of the country and make a rise in investments. This step of cashless is truly going to create ripples of big success.
  • For the industrialists, it is a great time to integrate the cashless practices will be benefitting in the near future.
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