Lok Sabha Question No. 2720 (UNSTARRED), answered on 2017-03-17
Subject: Digital/Cashless Transaction Charges
Ministry: FINANCE
Asked by: PARAYAMPARANBIL KUTTAPPAN BIJU, SULTAN  AHMED, PRAHLAD SINGH PATEL, M. UDHAYAKUMAR, A. ARUNMOZHITHEVAN, ANIRUDHAN SAMPATH, SUNIL KUMAR SINGH, RANJANBEN BHATT

## GOVERNMENT OF II\'DIA MINISTRY OF FINANCE

## DEPARTMENT  OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED  OUESTION NO.272O

## TO BE ANSWERED ON 17Ih MARCH.2Ol7l26TH PHALGUNA  SAKA. 1938

## DIGITAL/CASHLESS  TRANSCATIONS  CIIARGES

2720. SHRI P.I( BIJU:

SHRI SULTAI\ AHMED:

SHRI PRAHLAD SINGH PATEL:

ADV.M. UDHAYAKUMAR:

SHRI A. ARTII{MOZHITHEVAN:

DR A. SAMPATH:

SHRI SUNIL KUMAR SINGH:

SHRIMATI  RANJATTBEN BHATT:

## QUESTION

## Will the Minister  of FINANCE  be pleased  to state:

- (a) whether the Govemment  proposes to streamline digital/cashless palment mechanisms;
- (b) if so, the details thereof along  with the slashing/recovery of fees/charges  against digital payments;
- (c) the details  of changes applicable  on digital payments as on date and disincentives for cash  payments  along with the amount of cash money free from punitive charges;
- (d) the details of percentage  of population  using digital payments  before and after demonetisation;  and
- (e) the details of the recorded growth/decline in digitaVcash  transactions  post demonetisation?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY FOR FINANCE (SHRI ARJUN RAM MEGHWAL)

(a) & (b): To encourage cashless transactions  and promote  the use of cards  and digital means in transactions, Govemment  has taken various steps. The move  is aimed at reducing cash transactions thereby  reducing  the risks and costs of handling cash at the individual level, improving the ease of conducting tmnsactions,  reducing tax avoidance,  reducing the cost of managing cash in the economy,  building a transitions  history to enable  improved credit access and financial  inclusion  and reducing  the impact of counterfeit money.  Various  mqrsures  have been taken to promote  digital  payments, detailed at Annex I.

- (c): Charges for Digital Payments.
- l. NEFT- This digital mode of Remittance  / payment  is being administered  by RBI and operated  by banks.  The detail ofcharges have been fixed by RBI vide its circular dated July 13,2012.
2. RTGS- This digital mode of Remittance  / payment  is being administered by RBI and operated  by banks.  The detail of charges have been fixed by RBI vide its circular dated February 04,2016.
3.  Transaction charges for cash withdrawal at ATMs beyond permissible  free monthly limit-
- i.  RBlhasissuedacircular(DPSS.CO.PD.No.316/02.10.00212014-2015)ontheusage of ATMs on August 14,2014 by which banks have been instructed to provide  a minimum of three free transactions on other bank ATMs per month in six metropolitan centres  (Delhi, Kolkata Mumbai, Chennai, Hyderabad & Bengaluru).  In respect of other places, a minimum  of five free transactions (including  financial  & non- financial transactions) are to be provided  to Savings bank (SB) account holders per month  on other bank ATMs.
- ii. In addition to this a minimum  of five free ATM trumsactions  per month is to be provided to all SB Account holders of the bank on bank's own ATM. The free transactions includes  financial  as well as non- hnancial ATM transactions. Moreover, this is a minimum cap.
- iii. Bank may charge a maximum  of Rs.20l plus applicable Service Tax per ATM transaction  after the permissible  free montNy  transaction  limit.

(d) &(e): Details are at Annex II.

## Mcasures Taken to Promote Digital Payments

- Govemment  has adopted multi-pronged approach to encourage payment through cards/digital means which inter-alia includes promoting and adopting  several  measures for card/digital transactions,  creating acceptance  infrastructure,  encouraging mobile banking/payment  channels  and creating awareness, framing  necessary guidelines  to ensure that merchant payments  are interoperable across the broad spectrum of payments and settlement  systems, framing new guidelines or revising  existing guidelines to allow POS/Mobile  POS terminals in Tier III and below towns and rural areas, etc. With a view to implementing the above scheme, a Task Force and a Committee have been constituted to review the Framework related to Digital payment system  in the country and to recommend appropriate measures for encouraging digital payments. The report of the committee  is available  on the Ministry  of Finance at http://finmin.nic.in.
- a Bharat Intert'ace for Money (BHIM) app has been launched  for simple,  easy and quick payment transactions using Unified  Payments Interface (UPI) and Unstructured Supplementary Service Data (USSD). It also works on basic/features  phones,  without internet.
- a NPCI has been accorded  In-principle  approval  by Reserve Bank of India (RBI) for launch of Pilot for the Aadhaar Pay payment  mechanism. This will enable the merchant to accept payments  from customers using their Aadhaar  number  and biometric  data which will be authenticated by the UIDAL The transactions will be part ofthe existing Aadhaar Enabled Payment System  (AEPS) which is operated  by the NPCI with approval  from RBI.
- a NPCI has also been given in-principle  approval  for launching  the National  Electronic Toll Collection (NETC)  system which uses the RFID tags for vehicle  identification  and toll calculation; the toll will be automatically  deducted from the prepaid  accounts linked  with the respective  RFID tag.
- F'ollowing the cancellation of legal tender  of specified  banknotes,  as a special  measures between January  1, 2017 to March  31,2017,  all participating  banks and Prepaid Payment Instmment (PPl) issuers are directed no to levy any charges on customers for transactions upto Rs. 1000 settled on the Immediate  Payment  Service (IMPS), USSD based *99#  and Unified  Payment Interface  (UPI Systems) . a
- a RBI has also decided  that as a special measure between  1.1.2017  to 31 .3.2017  ,  in respect ofdebit  cart transanctions,  Merchant  Discount  Rate (MDR) has been capped  at 0.25 % for payment upto Rs. 1000/- and at 0.5% for payment for the value above Rs. 1000/- and upto Rs. 2000i-.

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