Lok Sabha Question No. 156 (STARRED), answered on 2023-02-13
Subject: Promotion of Digital Transactions
Ministry: FINANCE
Asked by: Vivek Narayan Shejwalkar

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA STARRED QUESTION NO. *156

ANSWERED ON MONDAY, FEBRUARY 13, 2023 / MAGHA 24, 1944 (SAKA)

## PROMOTION OF DIGITAL TRANSACTIONS

## *156. SHRI VIVEK NARAYAN SHEJWALKAR:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government is making efforts to promote transactions through digital platforms and it has also been successful to an extent, if so, the details thereof;
- (b) whether convenience fee is increasing unwanted burden on the people who use digital transactions even though people's interest has increased towards digital transactions during the last few years, if so, the details thereof;
- (c) whether the Government proposes to reduce the said convenience fee in future; and (d) if so, the details thereof?

## ANSWER

## FINANCE MINISTER

(Smt. Nirmala Sitharaman)

(a) to (d):  A Statement is laid on the Table of the House.

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## 16 th  POSITION

## STATEMENT REFERRED IN REPLY TO THE LOK SABHA STARRED QUESTION NO.  *156  ANSWERED  ON  13 th   FEBRUARY,  2023  BY  SHRI  VIVEK  NARAYAN SHEJWALKAR REGARDING 'PROMOTION OF DIGITAL TRANSACTIONS'

- (a) Promotion of digital payment is one of the priorities of the Government to facilitate hassle free and seamless banking transactions for the people of the country. Several initiatives have been taken by Government of India, Reserve Bank of India (RBI), National Payments Corporation of India (NPCI) and banks, to promote digital transactions and to create awareness about digital payments in the country.

Some of the initiatives are Bharat Interface for Money - Unified Payments Interface (BHIM - UPI), UPI-123, Aadhaar enabled Payment System (AePS) etc. Also, Ministry of Electronics  and  Information  Technology  (MeitY)  has  introduced  the  Incentive  Scheme  for promotion  of  RuPay  Debit  Cards  and  low-value  BHIM-UPI  transactions  for  the  current financial year. The Scheme provides financial incentive to Banks for promoting point-of-sale (PoS) and e-commerce transactions using RuPay Debit Cards and person-to- merchant (P2M) transactions of low value (i.e. up to Rs.2,000) on the BHIM-UPI platform. MeitY has allocated Rs.2600 crore for the Scheme for FY 2022-23.

As a result of the initiatives taken, there has been a paradigm shift in digital transactions in India which is reflected in terms of the increase in the volume of digital transactions over the last four financial years as illustrated below:

| Financial Year   | Volume (in crore)   |
|------------------|---------------------|
| 2018-19          | 2326                |
| 2019-20 3400     |                     |
| 2020-21 4374     |                     |
| 2021-22          | 7197                |

Source: RBI

As observed from the above table, there has been a growth of more than 200% in digital payment volume during the last four  years since  2018-19. Further,  as  per  the  data  sourced  from NPCI, UPI transactions registered in FY 21-22 were 45 billion, showing 8 times growth in last 3 years and 50 times growth in last 4 years.  Also, the AePS transactions during FY 21-22 have grown 4 times in last 3 years and 10 times since last 4 years.

- (b) to (d) As apprised by Public Sector Banks (PSBs) no convenience fee is charged  by the banks from the customers. Further, as apprised by Reserve Bank of India (RBI), vide its circular on 'Furthering  Digital  Payments-Waiver  of  Charges-National  Electronic  Funds  Transfer  (NEFT) System' dated 16.12.2019, banks have been advised not to levy any charges on savings bank account holders for funds transfer done through NEFT system which are initiated online (viz. Internet banking and/or mobile apps of the banks) with effect from 01.01.2020. Further, vide Circular 32 of 2019 dated 30.12.2019 of Department of Revenue, any charge, including the Merchant Discount Rate (MDR) shall not be applicable on or after 01.01.2020 on payment made through prescribed electronic modes i.e. RuPay Debit card, BHIM-UPI and BHIM-UPI QR Code.

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