Be Prepared: Cheques May Be Banned Soon Under Digital India Push!
Banks are gradually discouraging cheque usage due to cost overheads and disputes which come up regularly.
Business insiders are claiming that the present Modi Govt. may very soon ban the usage the cheques in India, and this would be done under Digital India mission.
After demonetization last year, cheques, along with netbanking and debit/credit cards, besides mobile wallets had become a major tool for financial transactions. But, now, even cheques can be removed from the system.
Cheques May Be Banned Soon?
Praveen Khandelwal who is the Secretary General of Confederation of All India Traders (CAIT), has claimed that Modi Govt. may soon abolish the usage of cheque books in India, for pushing Digital India vision.
CAIT is one of the strongest, most powerful lobby of businesses, which includes SMEs as well, and they have a strong clout over economic decisions made in the country.
Considering that the claim is coming directly from CAIT, then it must be carrying substantial weight.
During an event, he said,
“In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions,”
Note here, that Govt. has not made any comment or given any hint regarding this huge step.
Cheque Ban Would Be Feasible Right Now?
Although cheque payments also come under cashless mode of financial transactions, banks are slowly but gradually discouraging its usage, mainly due to cost overheads, and disputes which come up regularly.
For example, in April this year, SBI, India’s largest bank, imposed a special transaction fees for all cheque payments, done by non-SBI customers.
This special fee of Rs 100 was imposed on all cheque payments done for under Rs 2000, which are dropped in the cheque box.
As per SBI officials, only 8% of payments are being done by cheque in their bank, and out of that, only 2% are below Rs 2000.
SBI Card MD and CEO Vijay Jasuja said,
“We are only looking at recovering that clearing cost. When we are talking about digitisation and all modes are available, what is the need of paying by cheque?”
However, as per last year’s report by 6Wresearch regarding the market for cheque book scanners in India, it was found that between 2017-2022, the market will grow by 5.6%.
The report claimed that around 1 billion transactions are happening using cheques right now in India, every year; and the volume has increased after demonetization move.
In all probability, terminating 1 billion transactions suddenly by banning cheque books seems highly unlikely, especially when cheque form a huge part of cashless transactions, and thousands of small businesses are dependent on cheques for their payments.
But, as our experience says, anything is possible.
We will keep you updated, as we receive more information.