Demonetisation: Here's how transaction charge waiver on debit cards will benefit you
Amid the ongoing political outcry over demonetisation, the government on Wednesday announced several steps aimed at helping the cash-hit citizen of the country and to encourage widespread usage of digital payments post demonetisation.
New Delhi: Amid the ongoing political outcry over demonetisation, the government on Wednesday announced several steps aimed at helping the cash-hit citizen of the country and to encourage widespread usage of digital payments post demonetisation.
The government said that no transaction charges will be levied on debit cards till December 31. Here is how the transaction charge waiver on debit cards will benefit the common man:-
The move will help the farmers to meet their cash needs during the ongoing rabi season.
To ensure quick and unhindered flow of credit and cash to farmers during the current rabi season to deal with ban of Rs 500/1,000 notes, the government has allowed NABARD to disburse Rs 21,000 crore through cooperative banks to farmers. This will help over 40 percent small farmers who get crop loans from cooperative institutions.
The Railways has too waived service charges on online booking of tickets and telecom operators have agreed to make mobile banking services in feature phones free of cost till December 31.
While government departments and PSUs have been asked to make electronic payment to contractors and its employees, the Road Transport Ministry has asked automobile manufacturers to install digital RFID tag on all new vehicles to enable cashless payment at toll plazas and checkposts.
Similarly, the government has doubled the monthly transaction limit through e-wallets to Rs 20,000.
All these measures are meant to promote digital penetration, Economic Affairs Secretary Shaktikanta Das said while listing out various measures taken by the government to incentivise digital transactions.
Public sector banks, some of the private banks and some of the service providers that provide switching services have agreed to waive the service charges on the use of debit cards up to December 31, 2016.
As of now, Rupay debit cards have already waived the switching charges. Other debit cards that operate through international card network companies like Mastercard and Visa currently charge transaction charges.
The MDR (merchant discount rate) charges on use of debit cards, the charges being levied by banks and the switching charges will stand completely waived. So, there will be no charge on use of debit cards and banks will make announcement in this regard individually.
Telecom operators have also made mobile short code messages -- used mainly for banking services in feature phones -- free till December 31, 2016, in an attempt to promote mobile banking and cashless transactions.
This will provide a very cost-effective method of digital financial transaction, especially to the poor people with feature phones (which are currently 65 percent of the total phones in the country)," a finance ministry statement said.
Following the cancellation of old Rs 500 and Rs 1,000 notes, the government has taken a number of measures for farmers like higher cash withdrawal limits for farmers and registered traders in APMC markets / mandis, extension of time limit for payment of crop insurance premium, purchase of seeds with old notes from certain select government centres.
Steps have been taken to ensure availability of cash in rural branches of banks and 1.55 lakh post offices. Network of banking correspondents has also been activated with higher cash holding limits to meet requirements of people in rural areas, the ministry said.
As a relief to small borrowers taking loans up to Rs 1 crore, RBI has already decided to provide additional 60 days time for repayment of dues.
This will be applicable to personal and crop loans, including housing and agricultural loans, taken from banks, NBFCs, DCCBs, primary agriculture cooperative societies (PACS) or NBFC-MFIs.
Indian Railways has decided not to levy service charges of Rs 20 for second class and Rs 40 for upper classes on purchase of reserved e-tickets up to December 31, 2016. This would facilitate and encourage passengers to buy e-tickets instead of across the counter purchase through cash.
About 58 percent of the railway tickets are purchased online and the effort now is to increase the purchase of e-tickets.
It is expected that the above measure will encourage people to migrate to cashless transactions.