Almost Rs 25,000 crore cash transactions moved to digital post note ban: SBI

MUMBAI: In one of the most positive fallouts of demonetisation almost Rs 25,000 crore or 15 per cent of the total cash based transactions have moved to digital sources in the last two months, according to a survey conducted by the State Bank of India.

At least 41 per cent of people that SBI polled already who already had point-of-sale machines saw an increase in their transactions post note ban.

“This number could have been even higher because the behavioural shift has not happened yet and many merchants still prefer cash transactions when the transaction amount is not large,” said Soumya Kanti Ghosh, Group Chief Economic Adviser at SBI. “So they are mostly discouraging people from using PoS the for small transaction value of say less than Rs 200 or so.”

SBI has suggested that the government should quickly start the exercise of onboarding new merchants, particularly small and marginal traders, grocery shops, etc. on the digital platform by a more targeted approach.

The lender also said that onboarding of merchants could be an incentive and it is done by some support funds from Government. “We also suggest that RBI should enhance the mobile wallet user limits further to shift more of the cash transactions to digital wallets,” Ghosh said.

Recently, RBI revised the per month limits on mobile wallets spend to Rs 20,000 for users and to Rs 50,000 for merchant bank transfers. Although banks have supplied more than 1 lakh PoS terminals since demonetisation the supply is still low compared to high demand.

Almost 69 per cent respondents that SBI polled said that their business has been impacted due to note ban. The decline in business is less than 50 per cent for the majority of business polled.

Construction and informal roadside vendors were the worst hit with 55 per cent and 71 per cent respondents respectively saying that their business got reduced by more than 50 per cent.