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सेमिनार: अंग्रेज़ी सीखने का अवसर (23 सितंबर: दोपहर 3 बजे)
Q. Issues of cashless economy: Discuss how charges on cashless transactions affect the goal of cashless economy.
May 03, 2017 Related to : GS Paper-2

Ans :


Currently, the government of India is promoting for more cashless economy through various initiatives. To realise the true benefits of cashless society through the trinity of Jan Dhan, Aadhaar and Mobile that our government is promising, it is essential for the commercial banking system to bring in line. This means abolishing or reducing many of the extra charges that banks impose on customers and merchants for transactions.  


  • Today commercial banks are imposing customers and merchants for transactions, which hinders in the promotion of cashless economy. Recently many transactions like debit cards, online were made chargeable. 
  • Many such charges are mostly arbitrary, opaque to even educated customers, and wholly incomprehensible to most consumers, small merchants and traders who are supposed to migrate to the new system.


  • As government is aiming for cashless society, hence charging customers on online and debit card transactions does not makes any sense. It rather discourages cashless transactions. 
  • It is true that there is a cost to implementing all the infrastructure and connectivity, which has to be recovered. It cannot be done through taxes or high transaction fees. Else it will hurt the government’s initiative of cashless society.
  • The solution is to balance volume with immediate value. Most banks respond to quarterly profit data, they should make social and policy goals and government should support them in it.
  • It is apparent that short-term losses might lead to big mid-term gains. That outlook, of setting up a structure for inclusion, at zero or low cost today, can build a future consumer community of hundreds of millions.


The goal of cashless society is far reaching benefits on economy, but it should be done without charging extra on customers. Today many banking transactions tend to discourage the goal of cashless society. Hence government should come forward and support commercial banks in building required infrastructure and connectivity, then only we can realise the goal of cashless society.

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