Following incidents of inconveniences being faced by citizens in light of government withdrawing old currency notes, a two-member ministerial group met on Monday to formulate a strategy to put the Centre’s plans for creating an ecosystem for cashless transactions on the fast-track, a senior government official told The Indian Express.
“Coal and power minister Piyush Goyal and IT minister Ravi Shankar Prasad, on directive from the Prime Minister’s Office, took a meeting to make a strategy to fast-track cashless transactions in the system to diffuse the current crisis. It was scheduled to be followed by another meeting at the PMO later in the evening to discuss ways to promote cashless transactions,” the official said.
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In the meeting, which was also attended by secretary of Ministry of Electronics & Information Technology Aruna Sundararajan and secretary of Department of Investment & Public Asset Management NK Gupta, four major areas that could need a fillip from the government to push the digital payments system came up — mobile wallets, payment service operators, unified payments interface, and banking correspondence through common service centres (CSCs).
The official said that a special emphasis was given to banking correspondence through CSCs, especially in the hinterlands, where logistical hurdles make physical cash unavailable. There are around 2 lakh CSCs in India, of which, 20,000 function as banking correspondents while another 63,000 facilitate Aadhaar-based cash transactions.
The issue of unified payments interface (UPI) was also raised in the meeting. The UPI system was launched in August this year by the National Payments Corporation of India (NPCI), with 21 banks on board. However, the list did not include some of the major banks, which joined the system earlier this month. Banks such as the State Bank of India, HDFC Bank and Bank of Baroda did not go offer UPI services to their account holders in the first tranche. The official said that following the government’s decision to discontinue old denominations of Rs 500 and Rs 1,000, more banks are likely to join the bandwagon.
Even as mobile wallets in the country, operated by firms such as Paytm, MobiKwik, Oxigen, Freecharge, have seen phenomenal growth in the past few years, the number of transactions through these wallets, compared with other cashless means, was very low. According to data provided by the Reserve Bank of India, only 603.98 million transactions were made during 2015-16 through m-wallets, compared with 10.04 billion transactions on credit and debit cards.