IT ministry asks banks to set up board-level panel to promote digital payments
New Delhi: The IT ministry has asked all the banks to set up board- level digital payments committees to ensure board members with IT expertise work actively towards promoting cashless transactions.
Most digital transactions of banks are those conducted through credit and debit cards, mobile banking and Internet banking.
Ajay Kumar, additional secretary, ministry of electronics and information technology (Meity) tweeted on Wednesday: Promoting digitalpayments in @_DigitalIndia. All Banks to have Board level Digital Payments Committee @NPCI_NPCI @TheOfficialSBI @FinMinIndia.
However, it is still not clear whether only public sector banks have been urged to do this by the ministry or private sector banks also need to follow the directive.
“As of now, we have not received any directive from either the IT ministry or the ministry of finance to set up such a committee for digital payments. The government has been actively promoting digital transactions across the country since demonetization and as a result now, around 35% of our transactions are conducted through non-cash modes,” said a digital banking official of a private sector bank, who did not wished to be named.
Person to person (P2P) transfers have revolutionized with the introduction of Unified Payments Interface (UPI) and it also accounts for the majority transactions conducted through the mobile banking platform, added the official.
UPI is a payment system launched by National Payments Corp. of India (NPCI) which facilitates instant fund transfer between two bank accounts on the mobile platform.
Transactions using UPI rose to a record 11.4 million in July, a five-fold increase since December, according to a statement from NPCI. UPI was launched in August 2016 with 21 banks, and is currently being offered by about 53 banks.
Last month, the National Payments Corporation of India said all co-operative banks in the country would be part of digital transactions by March 2018.
The number of debit cards rose 29% from 661.8 million in March last year to 854.9 million and the number of credit cards went up by 21.8% from 24.5 million to 29.8 million. The number of debit card transactions increased by 158.3 million whereas credit card transactions grew by 34 million, according to a report released in May by digital media tracker MediaNama.
In February, the responsibility for promotion of digital transactions, including digital payments, was passed on to MeitY from Niti Aayog.
The government has set a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, AadharPay, IMPS and debit cards.