Reserve Bank of India Governor D Subbarao said a goal of the regulator and the banking industry was to make the country a less-cash society, and this had to be achieved by encouraging and expanding the electronic payment and settlement system across India.
“Though large-volume transactions have been shifted to the electronic mode, the retail payment system continues to be paper-centric and we remain largely a more cash society compared with peer countries like Brazil, Mexico and Russia,” he said here on Friday, during a function at the Institute for Development and Research in Banking Technology.
The value of bank notes and coins in circulation in India is 12 per cent of the GDP — which is high relative to the peer countries. The number of non-cash transactions per person is just six per year, which is also very low compared to the peer group, he said. Subbarao said one of the important reasons for this situation was the slow pace in infrastructure building such as ATMs and other electronic payment and settlement systems.
The country still had one of the lowest number of ATMs and point-of-sale terminals — at 63 ATMs and 497 PoS terminals per one million population. Other reasons were limited product innovation and lack of initiative by banks, he said. Mandatory establishment of ATMs in smaller towns and rural areas, recent permission to non-banking institutions to set up their own ATMs and sharing infrastructure cost would be some initiatives aimed at achieving the goal of making the country a less-cash society, he said.
Awards in technology deployment
The RBI governor today gave away awards, instituted by IDRBT, to banks under various categories in technology deployment and usage.
Canara Bank won the award for use of technology for financial inclusion while State Bank of India and Federal Bank Limited won two awards each, one for mobile banking and electronic payments and the other for customer relationship management and business intelligence initiatives.
ICICI Bank Limited and Karur Vysya Bank won two awards each for IT implementation and management and managing IT risk. IndusInd Bank and South Indian Bank Limited won one award each for IT for operational effectiveness and managing IT risk respectively.