You are here: Home » Economy & Policy » News
Business Standard

Retail cheque payments down to a trickle in FY20 to 2.96%: RBI data

That the efforts towards digitization have been very successful is clear from the steady fall in the share of paper clearing

Topics
RBI | cheque book | Digital Payments

Press Trust of India  |  Mumbai 

RBI
The volume share nearly halved to 4.60 per cent and value fell further to 22.65 per cent in FY2019, according to the RBI.

The aggressive push to a and settlement system has paid rich dividend to the Reserve Bank as the share of paper clearing in retail payments has come to trickle in FY2020, show the latest data.

In FY2020, the share of paper clearing in total retail payments plunged to just 2.96 per cent in terms of volume and to 20.08 per cent in terms of value, the data showed.

In FY2016, when the central bank began to push aggressively on the back of the contentious note-ban, paper/cheque clearings accounted for a high of 15.81 per cent in volume and nearly half in terms of value at 46.08 per cent of the total retail payments.

That the efforts towards digitization have been very successful is clear from the steady fall in the share of paper clearing. From 15.81 per cent in volume and 46.08 per cent in terms of value in FY2016, the same shrunk to 11.18 per cent and 36.79 per cent, respectively, in FY2017.

Come next year, the numbers plunged further with the volume dipping to single-digit at 7.49 per cent and value falling to 28.78 per cent in FY2018. The volume share nearly halved to 4.60 per cent and value fell further to 22.65 per cent in FY2019, according to the

Between FY2016 and FY2020, as a whole have grown at a compounded annual growth rate of 55.1 per centfrom 593.61 crore in FY16 to 3,434.56 crore in FY20, according to the data.

In absolute terms, the value has grown from Rs 920.38 lakh crore to Rs 1,623.05 lakh crore during this period, clipping at an annual compounded rate of 15.2 per cent. In FY17 digital payments jumped to 969.12 crore from 593.61 crore in the previous year in volume, and to Rs 1,120.99 lakh crore in value.

Similarly, the numbers continued to scale new peaks with volume growing to 1,459.01 crore and value jumping to Rs 1,369.86 lakh crore in FY18. Come FY19, the numbers clipped at a faster pace with volume jumping to 2,343.40 crore transactions while the value inched down to Rs 1,638.52 lakh crore.

Given the pandemic and the lockdown restrictions, the digital payments volumes are set to jump manifold while the value could see a further plunge given the mammoth crisis that everyone faces following the pandemic.

The digital payment push started almost a decade back with limited access to NEFT, and ECS payments. Later with government push digital payments gained further momentum.

The development of UPI-based payments as well as app-based payments just pushed the boundaries and has since then witnessed blossoming of a myriad of payment systems, entry of non-bank players, and a gradual shift in the customer behaviour from cash to digital payments.

Behind all these, the Reserve Bank has played the crucial role of an operator, catalyst and facilitator, regulator and supervisor.

Some recent RBI initiatives to enhance security and increase customer confidence in digital payments include mandating use of only EMV chip and PIN-based debit and credit cards from January 2019; tokenisation from January 2019; facility to switch on/off transactions; mandatory positive confirmation to remove any ambiguity of NEFT/funds transfers from March 2010, and January 2019, respectively.

One of the biggest outcomes of these measures is the massive change in the customer behaviour-for instance the debit card usage has jumped from 20 per cent in FY16 to 45 per cent in FY20.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sun, October 18 2020. 17:24 IST
RECOMMENDED FOR YOU
.