Cash­less trans­ac­tions boom

Business Bhutan - - Front Page - Kr­ishna Ghal­ley

With the ad­vent of tech­nol­ogy, peo­ple turn­ing to­ward cash­less trans­ac­tions are on a rapid rise.

The INR cri­sis that hit the coun­try in 2012 con­trib­uted to the pop­u­lar­ity of cash­less trans­ac­tions since Bhutanese shop in bor­der­ing In­dian towns. Post-de­mon­e­ti­za­tion, the trend shot up, with lack of ac­cess to INR de­nom­i­na­tions 500 and 1000.

Now, with more fi­nan­cial in­sti­tutes pro­mot­ing easy and con­ve­nient cash­less trans­ac­tions, banks are also cash­ing in on the busi­ness. If banks can­not pro­vide enough INR, peo­ple pre­fer cash­less trans­ac­tions whereby they can de­posit and with­draw from In­dian ATMs.

Cheques, De­mand Drafts (DD), e-pay­ment sys­tem and ATM card swip­ing

have en­hanced cus­tomer ser­vice. For in­stance, B-wal­let fa­cil­i­ties from Bank of Bhutan (BOB) fa­cil­i­tate easy fund trans­fer and recharg­ing of call vouch­ers with­out us­ing pa­per vouch­ers.

An of­fi­cial from the Druk Pun­jab Na­tional Bank (DPNB) said that DD and Real Time Gross Set­tle­ment (RTGS) for In­dian busi­ness­men top cash­less trans­ac­tion ser­vices.

Since Bhutanese land up pay­ing in Ngul­trum (Nu), banks would suf­fer as hun­dreds of In­dian mer­chants visit them for ex­change of Nu with INR. Bhutanese thus landed pay­ing up to 10% ex­tra for the goods if paid in Nu.

How­ever, since Jan­uary 2016, the Royal Mone­tary Au­thor­ity (RMA) au­tho­rized fi­nan­cial in­sti­tutes to fa­cil­i­tate In­dian mer­chants with INR through RTGS or DD. Now, ev­ery bank can ap­prove RTGS up to Nu 50,000 to a cus­tomer with a valid voter iden­tity card. Above this limit, they have to pro­duce PAN card for the fa­cil­ity. More than Nu 5mn a day is trans­acted via th­ese ser­vices in DPNB. The charge ranges from Nu 35-15,000 per DD de­pend­ing upon the amount.

Cash­less trans­ac­tions of­fer some ad­van­tages to both bankers and cus­tomers. Most im­por­tantly, ev­ery trans­ac­tion re­mains recorded so there is lim­ited scope for tax eva­sion. “It ul­ti­mately helps the gov­ern­ment,” said the DPNB of­fi­cial.

Also, cash­less trans­ac­tions are se­cured pro­cesses with­out di­rect deal­ing with cash, which could oth­er­wise be robbed any­time. Other ben­e­fits are sav­ing time and en­ergy.

But the ques­tion of payer cred­i­bil­ity through cheque is per­ti­nent as chances of cheque bounce ex­ist. “Though the cen­tral bank has reg­u­la­tions put in place to curb such prac­tices, peo­ple can be fooled by oth­ers,” said a bank of­fi­cial.

Mean­while, BOB has many on­line bank­ing fa­cil­i­ties like MBOB and B-wal­let ser­vices among oth­ers. BOB’s MBOB users have reached 56,000. “The num­bers of on­line trans­ac­tions are in­creas­ing daily and it is a chal­lenge to han­dle them,” BOB’s Chief Ex­ec­u­tive Of­fi­cer, Pema N Nadik said.

Up to Nu 1.3mn is trans­acted a day in terms of mo­bile top up for both B-Mo­bile and T-Cell. Like­wise, fund trans­fer reaches up to Nu 40mn a day. “Peo­ple keep on us­ing cash­less trans­ac­tions. We need to work more in the branch of­fices to pro­vide the ser­vices to the peo­ple,” said Pema N Nadik.

BOB has also in­tro­duced ‘INR Pre­paid card’, which al­lows cus­tomers to take de­posits up to INR 50,000 a month and with­draw from any In­dian ATM with­out trans­ac­tion fees.

For Bhutan De­vel­op­ment Bank Lim­ited (BDBL) in Phuentshol­ing, cash­less trans­ac­tions have risen over­time. Now more cus­tomers pre­fer on­line bank­ing fa­cil­i­ties, ac­cord­ing to BDBL’s As­sis­tant Branch Man­ager, Tandin Dorji.

BDBL has also opened Ge­wog bank­ing Sys­tem (GBS) reach­ing the fa­cil­i­ties to peo­ple’s doorsteps. The bank has mo­bile bank­ing sys­tem in place for the cus­tomers.

T- Bank lim­ited is also in the process of go­ing 100% cash­less trans­ac­tions through in­ter­net bank­ing. Most of the fa­cil­i­ties are al­ready in place for on­line trans­ac­tions and bank­ing while the re­main­ing fa­cil­i­ties for mak­ing e-pay­ments will be launched soon, ac­cord­ing to T-Bank’s Chief Bank­ing Op­er­a­tor, Laxmi Prasad Giri.

T-Bank of­fers in­ter­net bank­ing, mo­bile bank­ing and ‘Point of Sale’ ser­vices, a sys­tem com­bined of soft­ware and hard­ware al­low­ing mer­chants to make key trans­ac­tions. “We are in the process of dig­i­tal­iz­ing fi­nan­cial ser­vices within the next few months,” said Laxmi Prasad Giri. Go­ing cash­less, he said, could save the gov­ern­ment cost of print­ing cash and other as­so­ci­ated costs.

For T-Bank also, cus­tomers opt­ing for on­line bank­ing are on the rise.

Though the gov­ern­ment and RMA are en­cour­ag­ing peo­ple to avail cash­less trans­ac­tions, fi­nan­cial lit­er­acy in ru­ral ar­eas is yet to im­prove. The Chief Bank­ing Op­er­a­tor said go­ing cash­less would also se­cure the peo­ple and the na­tion from threats like ter­ror­ism.

For peo­ple, on­line or cash­less bank­ing sys­tem has helped them im­mensely. A pri­vate em­ployee, Tsh­er­ing Tashi, 35, said that us­ing fa­cil­i­ties like MBOB and other e-pay­ment sys­tems has brought about a rev­o­lu­tion in the fi­nan­cial ser­vices sec­tor. “Now the banks are not as much crowded and monthly util­ity bills can be paid on­line.”

In­dian mer­chants have also ben­e­fit­ted hugely through cash­less trans­ac­tions in Bhutanese banks by en­hanc­ing trade with Bhutanese cus­tomers. Now, they do not have an is­sue ac­cept­ing Nu since they can get INR after vis­it­ing Bhutanese banks through RTGS. “Oth­er­wise it was a prob­lem for ev­ery­one. We did not ac­cept Bhutanese cur­rency and they did not have INR,” said an In­dian busi­ness­man.

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