Banks are currently pressurised by chores related to demonetisation and as a result it may take a while to streamline all cashless mechanisms, Defence Minister Manohar Parrikar said on Wednesday, adding that some laws related to charges levied on digital transactions may need to be tweaked to make cashless systems more efficient and attractive.
Speaking to the media on the sidelines of the ‘Digi-dhan’ mela organised by the State Government in Panaji, Parrikar also said that it will not be too difficult to make Goa 50 per cent cashless.
“The transactions have almost increased to four times. Cant say because many of the banks are not ready with data. They are too busy with this demonetisation process, but it has definitely increased to more than double. That much we are confirm,” Parrikar told reporters here.
Parrikar said that there was need to incentivise online direct transfers, but also said, citing examples, that current regulations had limitations as well as contradictions, which dissuaded people from transferring money digitally.
“It is very surprising, but our laws and our positions are very... if you take a debit card go to an ATM and withdraw cash, there is no charge. Actually the bank requires more, cost-wise, to maintain an ATM because it has to insure, transmit the money everyday or alternate day, it has to take the risk, it has to put a security mechanism, watchman, all those costs. Same debit card, if I use it for payment to a merchant I have to pay transaction fee. This is out of some regulation which will have to be properly amended or changed," he explained.
"Suppose I withdraw cash and pay him the cash, there is no transaction fee, but if I pay him directly or by credit card, he receives it from the bank, there is a transaction fee. This is a very strange position but it is there. Old systems and habits die hard," Parrikar also said, adding that developed country like Sweden took a decade in the real sense to reach a high degree of cashless transactions.
“As we proceed, we will understand the difficulties. As we proceed we will realise what are the problem,” Parrikar said.
The former Goa Chief Minister also said, that Goa could go 50 per cent cashless soon. “In Goa, it is not very difficult to reach 50 per cent, how long it will take will depend on various bottlenecks... like for example POS machines. As more and more POS machines come, more and more transactions will shift to cashless,” he said.
He also said, that there was a variety of mechanisms for making payments digitally and people across ages could find one most suited to their temperaments. "There are so many mechanisms available and each need not be comfortable only with one time while some... the new generation might be very comfortable with programmes like UPI or USSD, some earlier generations might be more comfortable with debit cards, credit cards,” he added.
Over the last one month, Parrikar said that 30,000 people had been sensitized vis a vis digital translation and 4,000-5,000 vendors trained in the use of cashless transactions.
"Maybe around 3,000 UPI have been loaded for actual use, maybe around 1,000 POS machines have been added, of course there is a shortage of POS machines. The demand is much more, but once you sensitise, ultimately over a period of next one month, these POS machiens will be set up. So the quantum of cash transactioins and transactions through cashless mode there is a clear change which is happening," he said.
"In Goa, the cashless mode has increased by more than four to five times. This is just an estimate, I do not have the exact figures but when we had started it had already doubled and we estimate that now it is almost around four times," he also said.