Lok Sabha Question No. 3336 (UNSTARRED), answered on 2019-12-09
Subject: Digitisation in Banking Sector
Ministry: FINANCE
Asked by: Mala Roy

## 3336. MS. MALA ROY:

Will the Minister of FINANCE be pleased to state:

- (a) the status of digitisation in the Banking sector;
- (b) whether the Government has taken steps to ensure cent per cent digital transaction in banking sector, if so, the details thereof;
- (c)  whether  consumers  are  not  so  enthusiastic  to  avail  these  facilities  on  account  of  charges  levied  by banks on such transaction; and
- (d)  if  so,  the  steps  taken  by  the  Government  to  promote  consumer  friendly  banking  services  in  the country?

## Answer

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a) Scheduled Commercial Banks (SCBs) have adopted Core Banking Solution (CBS) platform and this facility is being used by SCBs and their customers. All new bank branches are required to be opened in CBS platform only. This has enabled customers to go to any bank branch and get the desired services. ATMs, mircro-ATMs and Point of Sale (PoS) terminals  are  also  enabled  with  inter-operability  across banks.
- (b) to (d) Reserve Bank of India (RBI) is operating and managing centralized payment systems such as Real  Time  Gross  Settlement  (RTGS),  National  Electronic  fund  Transfer  System  (NEFT)  and  National Electronic  Clearing  Service  (NECS).  RBI  has  also  authorized  National  Payment  Corporation  of  India (NPCI) to operate  Immediate Payment System (IMPS), National Automated Clearing House (NACH), Aadhaar Enabled Payment System (AEPS), Aadhaar Payments Bridge System (APBS), Unified Payment Interface (UPI) and RuPay Debit Card.

As apprised by RBI, total  number of online  transactions  including  RTGS,  Electronic  Clearing  Service (ECS),  NEFT,  IMPS,  NACH,  UPI  (including  Bharat  Interface  for  Money  (BHIM)  and  Unstructured Supplementary  Service  Data  (USSD)),  Prepaid  Payment  Instruments  (PPIs),  Credit  Cards  at  PoS  and online, Debit Cards at PoS and online, since 2016-17 is as follows:

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION No. 3336

Answered on Monday, December 9, 2019/ Agrahayana 18, 1941 (Saka)

## Digitisation in Banking Sector

| Volume (Number of transactions in million)   | Volume (Number of transactions in million)   | Volume (Number of transactions in million)   | Value (in billion Rupees)   | Value (in billion Rupees)   | Value (in billion Rupees)   |
|----------------------------------------------|----------------------------------------------|----------------------------------------------|-----------------------------|-----------------------------|-----------------------------|
| 2016-17                                      | 2017-18                                      | 2018-19                                      | 2016-17                     | 2017-18                     | 2018-19                     |
| 9,780                                        | 14,714                                       | 23,384                                       | 11,21,649                   | 13,70,845                   | 16,38,494                   |

As  observed  from  the  table,  both  in  terms  of  volume  and  value,  online  transactions  have  increased significantly during the last three years, which indicates wider adoption of digital mode by the consumers.

Ministry  of  Electronics  &  Information  Technology  (MeitY)  vide  its  Notification  dated  27.12.2017  has inter-alia, envisaged that Merchant Discount Rate (MDR) applicable on Debit Card/BHIM UPI/AadhaarPay transactions of less than or equal to Rs.2000/- in value will be borne by Government for a period of two years with effect from 1.1.2018.

Vide  RBI  circular  on  'NEFT  and  RTGS  systems  -  Waiver  of  charges'  dated  11.06.2019,  processing charges and time varying charges levied on banks by RBI for outward transactions undertaken using the RTGS system, as also the processing charges levied by RBI for transactions processed in NEFT system is waived by RBI with effect from 1.7.2019.

The banks are also advised by RBI to pass on the benefits to their customers for undertaking transactions using RTGS and NEFT systems. This waiver of processing and time varying charges by RBI on banks will reduce the cost of RTGS and NEFT transactions and will give fillip to digital fund  movement.

RBI has launched a scheme 'Ombudsman Scheme for Digital Transactions, 2019' on January 31, 2019 to provide for a mechanism of Ombudsman for redressal of complaints against deficiency in services related to digital transactions. The Scheme came into force on January 31, 2019.

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