State Bank of India Chairman Arundhati Bhattacharya has said that the ‘Indian economy can’t become cashless completely’, and asserted that it could be a ‘less-cash’ economy at best.
Speaking at the Wharton India Economic Forum 2017 yesterday, she, however, said that demonetisation has surely pushed the country towards digital banking system.
“Whether demonetisation came prematurely, only history will tell. While it has indeed given a huge push to the digital economy, I don’t really believe that India can be a cashless society. I always say that we will be a ‘less-cash’ economy that is a more reasonable goal to work towards,” Bhattacharya said.
On transaction cost conferred upon users who opt for the digital methods, which is being aggressively promoted by the government, she agreed that the cost advantage must be given to consumer.
“However, we are at a stage where we haven’t been able to completely throw away the manual and usher in the digital. Hence, the cost advantage of the latter is cancelled out by the cost disadvantage of the former, thus giving rise to a great hindrance in the path to a complete digital economy and cashlessness,” she said.
“Transactions will become less costly, but only over a period of time. But it is valid that until that happens, people will question why they should switch to digital if it costs them money, and that will elongate the transition,” she added.
There has been a debate going on in public domain over transaction charges being slapped by digital wallets and banks on digital payment methods.
Speaking about digital awareness in rural areas, she cautioned, “If we try to push the digital economy too fast, too quickly, the abuses will then also become prevalent.”
Bhattacharya, according to PTI, feels that the prevailing situation arising out of demonetisation will get normalised by end-February.
"We believe that the situation (arising out of demonetisation) will become totally normal by the end of February," she said.
She said that SBI is ensuring that account holders are not made to stand in queue, by supplying adequate cash to bank branches so that money can be withdrawn at their convenience.
The Centre had on November 8 last year, scrapped Rs 500 and Rs 1,000 notes, which led to long queues outside bank branches.
Post demonetisation, the country’s largest bank witnessed a boom in the adoption of its tech-enabled services. The SBI’s wallet is now downloaded 70,000 to 80,000 times daily, compared to 6,000-7,000 before demonetisation.
Also, transactions at SBI’s POS touchpoints normally amounted to Rs 95 crore a day, but now it has crossed Rs 450 crore mark.