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Now, Modi govt mulls scrapping cheques to push digital transaction

Wednesday November 22, 2017 12:06 PM, & Agencies

Cheque Book Ban

New Delhi:
After facing failure to encourage people to use digital mode of transaction through forced currency ban, the Modi government is now reportedly planning to scrap cheque books.

The government had in last November banned Rs 500 and 1000 currencies to, what is aimed, put a curb corruption, black money and terrorism.

However, after none of these objectives fulfilled, the government changed its motive behind the sudden decision to scrap currency note, it started talking of digital economy and asked people to abandon cash and rely more on digital mode of transaction method.

However the government failed even on this front because of various reasons - including lack of the needed IT infrastructure and poor internet speed.

But, instead of looking at the real causes of why it failed the government is reportedly coming with another diktat - this time to scrap cheque books and thus forcing the people to use internet banking.

“In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions", Praveen Khandelwal, Secretary General of Confederation of All India Traders (CAIT) told reporters at the launch of ‘Digital Rath’.

"Digital Rath " is a joint initiative of the CAIT and Mastercard to encourage traders to adopt digital transactions.

“The government spends Rs 25,000 crore on the printing of currency notes and another Rs 6,000 crore on their security and logistics.

Moreover, banks charge 1 percent on payments through debit and 2 percent 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.

India holds a goal of 25 billion digital payments by end of this fiscal year. If chequebooks are banned, India might move closer to its target.

Experts however said that banning of cheque books will cause inconvenience to the traders and businesses as according to reports 95 percent of their transactions take place through cash or cheques.

There are others who fail that the government is wasting their and its own time by imposing such diktats instead of improving the basic infrastructure.

"The existing infrastructure is not at all ready to handle the load. We face problems every day while using online mode. Some times the server is down and sometimes we do not get the transaction password in time. Unless and until these issues are addressed, digital economy has no future here", Prakash Shah, a textile trader, said.

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