The Reserve Bank of India (RBI) has said that the decline in usage of cheques in India has been the lowest among 21 countries that include advanced economy nations, Asian countries, and BRICS members.
The Reserve Bank of India (RBI) has said that the decline in usage of cheques in India has been the lowest among 21 countries that include advanced economy nations, Asian countries and BRICS (Brazil, Russia, India, China, and South Africa) where payment systems are “considered robust, diverse and efficient.”
Turkey remained the only country following India that saw cut in its cheque volume lower than India — at a compound annual growth rate (CAGR) of -1 per cent during 2012-2017, RBI said in the report published on Tuesday.
India’s reduction in cheque volume stood at -2 per cent during the same period, declining by 10.8 per cent, according to the report titled Benchmarking India’s Payment Systems.
The report focuses on understanding the efficiency of various payment systems including cash, cheque, cards, ATMs, credit transfers, e-money etc., and customer preferences in using them compared with other countries.
The RBI attributed the slow decline in cheque volume during 2016 and 2017 to its increased usage following November 2016 demonetisation “where all modes of payment showed an increase,” RBI said.
The growth in cheque volume year-on-year in 2016 was 10.1 per cent followed by a marginal decline of 2.9 per cent in 2017.
The country’s share of cheque volume with respect to all payment instruments was high at 7.3 per cent during 2017 that ranked it at the bottom of the list of countries benchmarked. The percentage in 2012 was a whopping 43.5 per cent. The share, however, went down to 4.6 per cent during 2018-19.
Importantly, the lower decline in usage of cheques can also be seen from the efficiency of India’s cheque clearing system that has “T+1 settlement across India and the cheques processing is mechanised,” the report said.
The RBI said that India was only behind Japan, and the US with respect to e-Money transactions that stood at 3,459 million in 2017 due to key factors including ease of anywhere-anytime payment, one-click pay, offers, ease to track small expenses etc.