Increase in cash transactions with digital by 1.5 lakh crore

Even though digital payments have increased after the ban, cash is still king in the financial market. Especially in rural areas there are still cash flows. Despite the increasing prevalence of smartphones and the internet, there is sluggishness in digital payments in the rural areas. The Indian government has suddenly canceled 4 and 5 note currency without any notification or information. The aim of this notation was to bring the black out and strengthen the digital finance system.

However, in the RBI report, 5.5 per cent of the notes were deposited in the bank. At the time of the closure, Rs 5 lakh crore was seen in the market. Out of which only Rs 1 crore was not deposited. The amount of money that was not deposited at the time of the closure was quite modest due to the black money scene. After the ban, cash flows were thought to be halted but have increased. As of March 1, cash inflows have increased by 5% to 1.8 lakh crore, while before the notation there were 1.8 lakh crore.

However, e-payments have increased as a result of RBI's efforts to increase digital payments. Banks have been instructed not to charge customers any fees on National Electronic Funds Transfer (NEFT). Accordingly, no fee will be charged on digital payment till January 1st. Digital payment has increased in place of banks but the currency of the cash currency has declined.

ATMs provide various digital transactions in addition to cash transactions, but there are 5 ATMs per 1 lakh people in India. Consumers use less because ATMs also charge after a particular transaction. Banks also have to spend more on maintenance and software in ATMs.