The Indian Express (Delhi Edition)
‘Banks want Budget to boost digital transactions, disincentivise cash’
STATE BANK of India chairman Arundhati Bhattacharya said that in the pre-budget meeting with the government, bankers have told finance minister, Arun Jaitley to put in place provisions for incentivising digital and dis-incentivising cash in the coming budget.
“...we have found that very large corporates while paying to class three , class four employee are still paying in cash. Now we are requesting that all large corporates and 100 per cent of government institutions, must be mandated to pay all salaries /all payments through the transfer medium,” said Bhattacharya.
She said that the bankers are hoping that there will be some progress on the issue so that when the cash withdrawal restrictions are lifted, there will not be huge withdrawals.
Since demonetisation, SBI has seen a huge jump in transactions through debit cards and download of its phone application Buddy. In the last 50 days, SBI has installed at least 45,000 Point of Sale (POS) machines. “Whether it is a true move to digital or whether it will come back to cash again that is something that we will be able to understand only in six months time or only a few months after all restrictions go,” said Bhattacharya.
Bhattacharya also said that the merger of its five associate banks and the Bharatiya Mahila Bank (BMB) could be pushed to the next financial year as it is still awaiting for the government to notify the merger scheme.
“Probably, by a quarter or so (the merger could be delayed). The reason is we still have to get the government approval and even if we get it now, doing things like merging in the last quarter is never a very wise thing because there would be lot of IT system changes,” said Bhattacharya.
Bhattacharya said normally the banks close down all the IT system changes by midfebruary. “Sometimes IT system can impact something else quite unknowingly. So we don’t want to take any risks at the annual closing time. So we may want to do the annual closing and then look at it,” she said.