November 24, 2016 12:48:46 am
To further ease the cash crunch resulting from government’s decision to withdraw old Rs 500 and Rs 1,000 currency notes, the finance ministry on Wednesday announced a series of measures being taken by various agencies. While banks have decided to waive off transaction charges on debit cards, Indian Railways is removing charges on tickets booked online till December 31.
The government has also allowed NABARD (National Bank for Agriculture and Rural Development) to disburse Rs 21,000 crore to farmers, helping them sow winter crops like wheat ahead of the Rabi season, Department of Economic Affairs Secretary Shaktikanta Das said on Wednesday.
“NABARD has made available Rs 21,000 crore limit to the District Central Cooperative Banks (DCCBs) through State Cooperative Banks for Rabi agricultural operations. This will enable the DCCBs to sanction and disburse crop loans to the farmers through the network of Primary Agricultural Cooperative Societies,” the finance ministry said in a statement later in the day. This move will benefit more than 40 per cent of the small and marginal farmers who avail institutional credit/crop loans, it said. The government has already allowed farmers to buy seeds with old Rs 500 notes from designated agencies, and permitted them to withdraw Rs 25,000 against sanctioned crop loans. “Over and above this Rs 21,000 crore limit, as and when the additional limits are required, they will also be sanctioned by NABARD,” Das said.
To ensure farmers get credit in cash, the government has advised NABARD, RBI and banks to make the required cash available. Banks have been asked to ensure the district cooperative banks and regional rural banks, which provide loans to several farmers’ cooperatives, get sufficient cash. “This will ensure quick flow of credit and required cash to the farmers, especially for sowing and other agricultural operations during the current Rabi season,” the government said. To encourage widespread usage of digital payments, Das said all public sector banks and some private banks have agreed to waive the transaction cost for payments through debit cards.
As of now, Rupay debit cards have already waived the charges. There are 30 crore RuPay Debit Cards which have been issued, including those issued to Jan Dhan Account holders. Usage of RuPay has grown by nearly 300 per cent in the last 12 days. Other debit cards which operate international card network companies like Mastercard and Visa, currently charge transaction charges. So far, customers bear the transaction cost commonly known as merchant discount rate (MDR) on payments made to the government.
The Reserve Bank in 2012 had capped the MDR for debit card transaction at 0.75 per cent for transaction values up to Rs 2,000 and at 1 per cent for transaction values above Rs 2,000. However, there is no RBI cap on MDR on credit card payments. Railways has already waived service charges on online booking of tickets and telecom operators have agreed to make mobile banking services free of cost till December 31. Daily average number of passengers buying e-tickets online is 58 per cent and across the counter in cash is 42 per cent of the total purchase of tickets. Similarly, the government has doubled the monthly transaction limit through e-wallets to Rs 20,000.
While government departments and PSUs have been asked to make e-payments to contractors and 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, the finance ministry said.
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