SBI Chief Suggests Levies on Big Transactions for Cashless Economy

Disincentivising transactions by charging levies would be helpful in pushing India towards a cashless society.

Arundhati Bhattacharya, State Bank of India head (Photo: IANS)

Arundhati Bhattacharya, the State Bank of India chief, said in an interview with The Indian Express that the government should make efforts to disincentivise cash transactions. Demonetisation should not simply be about de-emphasising cash, she said, instead it should also include levies and charges above a specified limit.

Also Read: Why Going Cashless Is Going to Be Tough in India

Cash imposes a huge burden. We don’t understand it as it is not immediately visible. It is a huge burden on society. Why should a country have to take on itself a huge burden of managing a totally cash economy? It is not cheap and the physical infrastructure to maintain cash is not cheap.

Arundhati Bhattacharya

Bhattacharya points out that in a country where 91 percent of households have bank accounts, the current state might be the time to introduce these levies.

People are used to cash and getting them out of that is going to be a long and tough exercise. We have to continue to do something to keep up this push.

Arundhati Bhattacharya

SBI has opened as many as 1 lakh accounts per day, including those for financial inclusion, since the currency ban in the country, she said.

However, the infrastructure and maintenance required for this influx also led to an increased need for cash, which will definitely affect the banking sector.

This cost is something that will impact us immediately. The cost is something that the government should look at and help us. This is where the government can do a little hand-holding… that would be much appreciated.

Arundhati Bhattacharya

Bhattacharya also added that adequate amount of cash and bank currency in the system is needed before consumers can hope for a relaxation of the current withdrawal limit. Additionally, effects of demonetisation can be witnessed in the reduced expenditure of consumers, she said.

(With inputs from The Indian Express.)