Cashless transactions may have seen a rise post demonetisation, but the latest data is less encouraging with transactions on the decline both in terms of value and volume. Officials blame banks for not taking ownership of the drive in their respective domains. Charges on e-transactions, which were largely waived by banks for the initial months after scrapping of old high value notes on November 8, are back and seem to have taken the steam out of the digital push.
Latest Reserve Bank of India data on e-payment systems show that total digital transactions declined by about 27% to Rs 109.6 lakh crore from the post demonetisation peak of Rs 149.58 lakh crore in March. Data on the first 21 days of May also confirms the declining trend — at Rs 70,468 crore. The number of digital transactions declined 5.6% from 893.9 million in March to 853.1 million in April. The highest volume was recorded in December 2016 at 957.5 million, the month after demonetisation was announced in November. “Charges are levied on digital transactions while cash transactions such as ATM withdrawals are free. This should be otherwise as digital transactions cut banks’ cash handling cost,” an official said.
Cashless transactions include those conducted through credit and debit cards, internet banking, mobile banking, unified payments interface (UPI), unstructured supplementary service data (USSD) and prepaid payment instruments (PPIs). Currently, banks levy Rs 5-56 per transaction on e-payments/transfers via these modes. Public sector banks, which have almost 3/4th of the banking business, are also not fully getting attuned to digital transactions. “PSU banks are not electronically enabled adequately,” the official said.
The genesis of national framework on digital transactions goes back to February when the Union Cabinet took a decision to promote payments through cards and digital means, keeping in mind the impending scrapping of old Rs 500 and Rs 1,000 notes later.
To shape this movement, a national task force headed by Neeraj Kumar Gupta, secretary, department of investment and public asset management was set up in March. The panel chalked out the entire eco-system to from temporary waiver of charges on e-transactions to launch of Aadhar Payment system, UPI payment system, USSD and BHIM, among others.