State Bank of India (SBI) chief Arundhati Bhattacharya has backed Prime Minister Narendra Modi’s push for a cashless economy, saying that cash ‘imposes huge burden’ even as she wanted that government should come up with strict measures to disincentivise cash transactions once normalcy is restored in banking operations. Notably, Bhattacharya had welcomed the move to demonetise the Rs 500 and Rs 1,000 notes. “We will strive to restock ATMs at the earliest and make them operational. The Government has given enough exemptions to ensure urgent needs are met. We will work round the clock to ensure that customers have a smooth experience,” Bhattacharya had said. She opined that the banking system has handled such demonetisation in the past as well and will do so again this time.
#According to Bhattacharya, if India wants to de-emphasise cash, there should not only be an incentive for people to move towards a cashless economy but also a disincentive for transacting excessively in cash, while leaving out small-ticket transactions. “Cash imposes a huge burden. We don’t understand it as it is not immediately visible. It is a huge burden on society. Why should a country have to take on itself a huge burden of managing a totally cash economy? It is not cheap and the physical infrastructure to maintain cash is not cheap, she told The Indian Express in an interview.
#Bhattacharya said that the current withdrawal restrictions may be lifted only when there was an adequate amount of bank notes in the system. She also said that the impact of demonetisation on the economy was reflected in consumers deferring discretionary spending and in lower demand.
#According to Bhattacharya, with the increased spread of banking and, going by the latest survey that shows 91 per cent of households have bank accounts, the time may be opportune now for a charge or levy. “People are used to cash and getting them out of that is going to be a long and tough exercise. We have to continue to do something to keep up this push,” she said.
#Bhattacharya said that even after the withdrawal of high-value notes, leading to a scramble for cash at bank branches, SBI was opening 1 lakh accounts a day, including those for financial inclusion.
#During this period, there has been a huge increase in Point of Sale (POS) transactions and e-wallets. But she flagged off the cost for banks in maintaining the infrastructure needed to keep cash — extra payments for staff, security and transportation charges, recalibration of lakhs of ATMs and the loss of normal banking business — which is bound to hit the sector’s bottomline. “This cost is something that will impact us immediately. The cost is something that the government should look at and help us. This is where the government can do a little hand-holding… that would be much appreciated,” she said.