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Arun Jaitley: Banking sector is undergoing a major change


Today Union Finance Minister Arun Jaitley on encouraging the notion of a cashless economy said that large amounts of cash flowing in the economy have their own curses, most significantly being the factor that crime, corruption, and terrorism flourish on.

Arun Jaitley while speaking at the inauguration of Vijaya Bank’s ‘100 digital villages, 100 branches, 100ATMs’ initiative he said, “India is a cash user society. There are both economic and social costs involved in excessive use of cash. Cash has anonymity; ownership is not identified easily. While users are under risk,

Arun Jaitley while speaking at the inauguration of Vijaya Bank’s ‘100 digital villages, 100 branches, 100ATMs’ initiative he said, “India is a cash user society. There are both economic and social costs involved in excessive use of cash. Cash has anonymity; ownership is not identified easily. While users are at risk, the state suffers in terms of tax noncompliance. Crime, corruption, and terrorism flourish on cash. The banking sector is undergoing a major change, with the arrival of technology. There will soon be a time when banking will be a part of smartphones. However, transforming into a progressive economy from a developing one would mean taking up the path of a cashless economy.”

Mentioning the influences of the November 8 demonetisation drive, Jaitley noted that the move has led to the suppression of anonymity of ownership of cash, adding that it is bringing the economy more towards digitalisation. He then again added, with this move in place, there has been a growth of the tax base.

Arun Jaitley backing the introduction of the Goods and Services Tax (GST), he said, the new tax regime will expand the base of indirect tax, as the temptation and possibility of cash dealings get eradicated due to lack of benefit from input credit.

With the completion of three years of the Pradhan Mantri Jan Dhan Yojana, Jaitley said 300 million more people were included in the financial sector.

“When the ‘Pradhan Mantri Jan Dhan Yojana’ was flagged off, 42 percent of Indians did not have a bank account. Three years after this, 300 million more people have been added to the financial sector. The next step is to identify the beneficiaries of such welfare schemes. The spread of financial inclusion and digitisation to the rural sector should be natural,” he said.

At the end, he mentioned, “Incentivisation was necessary to financial inclusion. When bank accounts were opened, RuPay cards were provided to account holders. This will not only empower digitization, but will also help break the myth, that the poor will not be able to tune themselves to technology, as cash is neither beneficial to an individual nor the country, as it is an insecure mode of payment. We must further popularise features similar to the RuPay card.”