Govt eases norms to boost cashless transactions
- Sebi wants bourses to charge higher for illiquid stocks
- Rahul Gandhi says India feeling tired, directionless, only Congress can take it forward
- Bengaluru, India’s Silicon Valley, faces man-made water crisis
- Daler Mehndi sentenced to 2 years jail in human trafficking case, gets bail
- Xi Jinping re-elected as China’s president, loyalist Wang Qishan vice president
New Delhi: To promote cashless transactions after shrinking the cash economy through the demonetization of high-value notes, the government on Wednesday announced a slew of measures, including waiving of services charges on online purchases and recapitalization of district central cooperative banks (DCCBs), for providing winter crop loans to small and marginal farmers.
The Reserve Bank of India (RBI) had on Tuesday barred the use of demonetized Rs500 and Rs1,000 currency notes in small savings schemes such as Public Provident Fund, Post Office Savings Schemes, National Savings Certificates, Senior Citizen Savings Scheme accounts and Kisan Vikas Patra. However, late on Wednesday, the finance ministry announced that old notes can be deposited in post office accounts.
The government announced that the National Bank for Agriculture and Rural Development (Nabard) has provided Rs21,000 crore to DCCBs through state cooperative banks to provide loans to farmers to meet their credit requirements during the winter crop season.
RBI had prohibited DCCBs from dealing in old currencies after the demonetization was announced.
Talking to reporters on Wednesday, economic affairs secretary Shaktikanta Das said both government and some private sector banks have agreed to waive service charges on online transactions through their debit cards till 31 December to promote digital transactions.
ALSO READ | Tracking demonetisation: Our reading list
National Payments Corp. of India (NPCI) has already waived switching charges for RuPay cards.
“Other private sector banks are expected to do likewise. Consequently, the transaction charges— including the charges for switching services—stand waived till 31.12.2016. Together, these steps will improve the acceptance of debit cards at different establishments,” Das said.
To promote greater usage of payments through e-wallets, RBI has decided to increase monthly transaction limit for individuals from Rs10,000 to Rs20,000.
Similar enhancements have also been announced for merchants.
Das said more than 40% of small and marginal farmers in India depend on DCCBs for availing of institutional credit.
ALSO READ | Currency reform: A political gamble
“This will enable the DCCBs to sanction and disburse crop loans to the farmers through the network of primary agricultural cooperative societies (PACs). Further, additional limits will be provided by Nabard as per requirement,” he added.
Indian Railways has also agreed to waive service charges of Rs 20 for second class and Rs 40 for upper classes on bookings made online till 31 December.
“This will facilitate and encourage passengers to buy e-tickets instead of across the counter purchase through cash,” Das said.
At present, 58% of passengers buy railway tickets online daily. “The effort now is to increase the purchase of e-tickets. It is expected that the above measure will encourage people to migrate to cashless transactions,” a finance ministry statement said.
Das said for smoother digital payments at toll plazas and to avoid waiting time, vehicle manufacturers have been advised to provide electronic toll collection (ETC)-compliant radio-frequency identification (RFID) facilities in new cars.
The finance ministry has also advised all government organizations and public sector undertakings to use only digital payment methods such as internet banking, unified payment interface, cards, Aadhaar-enabled payment system, etc., to make payments to all stakeholders and employees.
“At the point of disbursing payments, it will be necessary for the authorities to provide the option of payments through cards, internet banking, unified payment interface, cards, Aadhaar-enabled payment system etc.,” the finance ministry statement said.
Das said no decision has been taken to extend the 24 November deadline— till when many government utilities have been allowed to receive demonetized banknotes.