He said the dream of India becoming a cashless society could only come true if there is institutional framework or arrangements to support it.
"If there are no arrangements in place, then how will this dream realise?" he wondered.
"There have to be arrangements first... In this country, over 70 crore people are earning Rs 10,000 a month (who cannot deposit the amount in banks), what will they do?
"There are no ATMs, no banks, no branches, people need to walk upto 20 kms... The country has already become a cashless society as the people don't have cash with them at the moment," Sibal said.
He said the government needs to take the states as well as the Opposition along for moving towards such a direction.
On Modi's suggestion to the people to embrace mobile banking, he asked how will the people do the transactions through mobiles when most of them are illiterate and not device-savvy.
In his monthly radio programme 'Mann ki Baat' yesterday, Modi appealed to the people to shift to the cashless system of transactions and asked the youth to help in this process by educating the elders and those not literate.
For the 8th straight day, Rajya Sabha and Lok Sabha were adjourned on Monday following vociferous protests of the Opposition on the demonetisation issue.
CPI leader D Raja blamed the government and the prime minister for disruption in the Houses, saying, "The government must be held responsible for this... Prime Minister must be squarely responsible for this impasse. The Opposition is demanding that the PM sits in the House during the debate (on the demonetisation issue)."
Stating that Modi makes "announcement" on "this same issue" outside the Parliament, he charged that the Prime Minister "does not want to sit and listen to the debate" and "speak inside the Parliament".
Alleging that the demonetisation move has subjected the country into "unprecedented financial turmoil", he said that the decision has impacted the whole economy "adversely".
"It has already started adversely impacting the manufacturing, service, agriculture and cooperative sectors, thereby, impacting the whole economy adversely. It has subjected common people to a lot of hardship, humiliation and suffering," he said.
Noting that informal sector accounts for over 80% of the employment, Raja said not all of those engaged in the sector have access to the banking system. "We are asking the government to review its decision and allow Rs 500/1,000 notes at least till December 30 or till the alternative arrangements are done," he said, adding "the government is not with (an) open mind (with regard) to some of the policies.