India has been trending for a while now because of their banknotes. Traditionally, India is a cash-base economy. Just recently, the Prime Minister of India Narendra Modi is leading the move of cracking down black money. PM Modi on note ban and digitization have made the people of India quite expectant. Not just that, India are starting to move towards a cashless and as well as digitization economy. It is no secret how card payments have always struggled to scale up because of several reasons.
A lot of discussions have been going around questioning the possibility of pushing this new approach of PM Modi. Slowly, India is making progress in their cash payment mode transformation. They are showing an increase in mobile and as well as card-based transactions. Though the government have been making advances in the recent years to highlight cashless transactions, it remained dependent to cash.
On November 9, PM Modi have announced his decision on demonetizing 1000 and 500 indian rupees. With this, a lot of withdrew bills or have deposited bigger money at automatic teller machine in all around the nature before they shut down temporarily. This has been the most ambitious and biggest step of the government to crack down black money and as well as fake currency as the first step in moving India to cashless economy.
When the announcement was made by PM Modi, the indian rupees of 100 and lesser denomination was the only circulations. With this, they have observed upsurge in the card payments, online transactions and as well as mobile wallets. Though most of the advanced countries is successful in popularizing the card payments, it is a difficult medium in India. So, the government have considered mobile as a platform. With mobile platform, it will combine digital value, digital authentication and as well as digital identity to create low-cost access to financial services.
PM Modi on Note Ban and Digitization
PM Modi together with Cabinet members, a meeting took place with a lot of agenda. But they also discussed about the fast track digitization for a cashless transaction as the highlight. PM Modi initiated the move of discussing the ways of digitization to enable larger cashless transactions through multiple means which he announced last month. PM Modi on note ban and digitization is part of the discussion in the cabinet meeting as well. The meeting took place in New Delhi together with the ministers of the Union Cabinet. The topic is originally not included on the agenda, it was brought up after the Cabinet members’ meeting was over together with PM Modi.
In their meeting, they put importance on the deadline of people depositing the old notes which is happening on December 30. The government have somehow push through in improving the digitization.
Digitization for Cashless Transaction
All throughout the meeting, the focus still remained about the digitization. They are considering the digital wallet services as one of the cashless way. This kind of digital payment mode is what the government is trying to expand the scope. With this, they aim to accept it in more places such as petrol pumps. Aside from that, they are also considering the metro stations as well.
There are already three-member committee of secretaries which is assigned just to study the ways of transitional India into a cashless economy. To encourage card payments via swipe machines at any business establishments, the banks of India have temporarily waived off the merchant discount rate.