As the country imposed a nationwide lockdown in the wake of coronavirus, transactions and payments via various banking modes witnessed great decline.
As the country imposed a nationwide lockdown in the wake of coronavirus, transactions and payments via various banking modes witnessed great decline. While cheque payments, ATM withdrawal, NEFT and RTGS, were down by 26-71% in April as against March, direct benefit transfers surged, according to the Reserve Bank of India (RBI) data, The Indian Express reported. Government’s Aadhar-enabled direct benefit transfer (DBT) payments spiked in April and reported 138% jump making DBT the only transaction and payment method which was used more than the normal levels. Overall, payments transactions shrunk by 46% in value in April over the previous month as the nationwide lockdown impacted various economic activities.
Days after imposing a lockdown, the government had announced cash benefits to people under the Pradhan Mantri Garib Kalyan Yojana to provide income support to the poor during the lockdown period. Under the financial relief package, the government had announced that 2.40 crore women Jan Dhan account holders will be given Rs 500 per month for three months. First instalment of Rs 2000 due to farmers in 2020-21 was also disbursed in April, among other measures.
Meanwhile, most of the contraction in online transactions was visible in cheque payments which saw a decline of 71% in April to Rs 1.63 lakh crore as compared to Rs 5.65 lakh crore in March. RTGS, which is otherwise the largest mode for online high value transactions has also dropped by 46.5% in value. While the RBI-operated Real Time Gross Settlement (RTGS) system was used to settle payments worth Rs 120.47 lakh crore in March, the same declined to Rs 64.43 lakh crore in April from.
Another highly used payment mode — NEFT — was no exception with the National Electronic Fund Transfer (NEFT) reporting a fall over 42%. The transaction value of payments dropped from Rs 22.83 lakh crore in March to Rs 13.06 lakh crore in April. Together, RTGS and NEFT account for over 90% of online transactions in the country.