Money & Banking
DeMo Effect: Digital India leapfrogs 3 years in just 7 months
Owing to demonetisation and initiatives to promote card transactions on point of sales (PoS) terminals, card and digital transactions have increased stupendously post November 2016. After analysing data for PoS sales and digital transactions, it appears that demonetisation has brought India at least three years ahead in digital payments, says a research note.
 
In the report, State Bank of India (SBI) says, "If demonetisation had not happened, it would have taken three years more for credit plus debit cards transactions on PoS terminals to reach the current level of Rs70,000 crore, assuming a yearly growth rate of 25%. Post demonetisation, Indian banks have been able to set up 11.8 lakh extra PoS terminals. We believe that increasing number of PoS terminals and ease of doing digital transaction will increase this level further."
 
According to the report, similar trends are observed in case of usage of pre-paid instruments, including m-Wallet, PPI cards, and paper vouchers and mobile banking too. Prepaid payment instruments (PPIs) witnessed a sharp growth, with transactions worth Rs10,700 crore in May 2017, compared to Rs5,100 crore in November 2016.  
 
Seven months after demonetisation, the transaction value is quite large and approximately double of what it had been in the corresponding month and period last year, the report says.
 
SBI feels that such digitisation will result in lower inflation. SBI estimated a simple regression model by taking headline consumer price index (CPI) inflation as dependent variable and credit plus debit cards transactions on PoS terminals in rupees billion (DCPoS) as independent variable. 
 
 
"The estimated model was statistically significant and the results indicate an increase in Rs 100 billion transaction by credit plus debit cards at PoS terminals will lead to around 1.1% decline in CPI inflation, ceteris paribus. This augurs well for a lower inflation regime going forward. We also believe that combined with a structural change in food inflation regime that we are witnessing
India is well poised for a favourable growth inflation mix in the coming years!" SBI added.

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COMMENTS

SRINIVAS SHENOY

4 months ago

I feel if proper payment security measures are in place, the volume of card transactions will significantly improve in the days to come.

Beena Kothari

4 months ago

Its a good sign. I favour digital transactions in most of the cases. But it cant be undertaken just by learning to do it. One must be educated about how to handle those products without hurting themselves due to ignorance.

Paytm acquires majority stake in ticketing platform Insider.in
E-wallet platform Paytm on Thursday announced it has acquired a majority stake in Insider.in, a ticketing platform of events company OML Entertainment, for an undisclosed sum.
 
Paytm has been expanding into the events ticketing industry that is currently pegged at Rs 4,000 crore, with online ticketing accounting for 10 per cent of the overall volume.
 
"Digital discovery and events marketing expertise will increase supply of quality events in India. This is a natural extension for us as we continue to build India's go-to destination for online movies and events," said Madhur Deora, Chief Financial Officer, Paytm, in a statement.
 
Insider.in provides tools, data and analytics to organisers that enables them to conceptualise, market and execute their events. 
 
"Our partnership with Paytm will enable us to reach more organisers and event goers, and exponentially grow this ecosystem in India," added Shreyas Srinivasan, CEO Insider.in.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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Deposited demonetised notes still being counted: RBI Governor
Eight months after demonetisation, RBI Governor Urjit Patel still refused to give the amount of junked notes deposited with banks, saying they are still being counted.
 
He also parried a question on Wednesday at a meeting of the Parliamentary Standing Committee on Finance on the names of 12 industrialists whose outstanding loans amounted to 25 per cent of the Non-Performing Assets in the banking system.
 
Patel was deposing before the committee, which is expected give a report on demonetisation during the Monsoon Session of Parliament beginning next week. 
 
He was specifically asked to give details of the value of the Rs 500 and Rs 1,000 notes which were allowed to be exchanged till December 30. 
 
He is learnt to have told the panel that the process of counting the junked notes was still on and the central bank has to verify fake notes for which specialised machines are being procured. While some machines have been procured, tenders have been floated to procure more, Patel was quoted by sources as having told the committee. 
 
Another reason given for the delay was the window given to the central bank to accept the junked notes collected by District Central Cooperative Banks (DCCBs) as well as pending issues with Nepal where Indian currency is used widely, sources said. 
 
Patel is learnt to have told the panel that the process was being expedited with help of machines and staff putting in extra hours. 
 
Patel said the total money in circulation in the country now was Rs 15.4 lakh crore against Rs 17.7 lakh crore at the time of demonetisation in November last year, according to sources.
 
The government last month allowed the District Central Cooperative Banks (DCCBs) to deposit the demonetised notes, collected during the five-day period after demonetisation was announced on November 8, 2016, with the Reserve Bank of India in 30 days.
 
Sources said a member told the RBI Governor that since the junked notes have so far not been been counted, how will the central bank know how much of these were fake or genuine. 
 
Samajwadi Party member Naresh Agrawal staged a brief walk out from the meeting after not being satisfied with the response to his questions. 
 
He is understood to have demanded the names of 12 industrialists whose outstanding loans amounted to 25 per cent of the Non-Performing Assets in the banking system. 
 
The meeting of the panel, chaired by Congress leader M. Veerappa Moily, lasted for about three hours. Former Prime Minister Manmohan Singh was among those present. 
 
Members also asked questions about the vigil being maintained over the use of bitcoins. 
 
Issues relating to GDP growth and progress towards digital economy also figured in the meeting. 
 
Members are learnt to have asked about transaction cost being levied on digital payments and inadequate presence of banks in rural areas. 
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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COMMENTS

Mihir

4 months ago

Mr. Patel, if you don't count by end of this month, you will have to enroll in counting class for junior kg kids.

Deepak Narain

4 months ago

They invent excuses for non-performance.

sohan modak

4 months ago

Oh, i think that smart customers have managed to exchange fake currancy for good new one thereby becoming real gainers in the deal. Besides, most probably, there was prior knowledge to interested parties which ensured a profitable exchange. won't be surprised if the so called old currancy is greater in amounts by several factors over the expected. Poor Mr. urjit Patel, if he can't cound these notes, who else can? What a show by the RBI. or, is it what he is supposeed to keep mum about?

GLN Prasad

4 months ago

Strange. When RBI receives such notes, they have such data, at the most there may be cross checks or matching in case of discrepancies, one can not understand such lame excuse of still counting during the era of digitalization. If it is oursourced, any agency should have collected total amounts lying of such notes bank wise through mail and should have completed the task in less than a day.

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