Government Mandate – Link All Savings Account to Internet Banking by March 31
In an attempt to push digital transactions in Indian economy, government has issued a mandate wherein, all savings bank accounts in India are to be linked to Internet Banking. This has to be completed within March 31, 2017. Interestingly, nothing has to be done by the account holders as the banks will be upgrading their savings accounts to internet-enabled savings accounts automatically.
Apart from this plan, the government is also exploring the feasibility of increasing RuPay card penetration in India by means of mass circulation. Government wants the lion’s share of Indian population to be in possession of RuPay cards.
In case you didn’t know, National Payments Corporation of India (NPCI) was the organization that came forward with RuPay cards. The cards were introduced in India after India’s banking industry’s regulatory body – Reserve Bank of India expressed its will to empower Indian citizens with a payment card that can serve multiple purposes. NPCI acted on this wish and launched the now popular RuPay Card.
Some data points to keep in mind
Talking data, 65% of all savings accounts operational in India already have Internet banking facility enabled. However, the remaining 35% may very soon be under the Internet banking umbrella as government is eyeing for the last day of fiscal 2016-2017 as the final date for such conversion.
In March 2016, Reserve Bank of India released some data. As per the data, there were 1,170 million savings bank accounts in India in year 2015. In 2014, the number stood at 978 million.
Union Minister for Electronics and Information Technology Speaks
Ravi Shankar Prasad – Union Minister for Electronics and Information Technology called for a meeting with ministry’s senior officials and instructed them to comb through various options that can be used by the government to implement digital payments infrastructure in Indian economy.
According to Ravi Shankar Prasad, the ministry received the government mandate and now it is looking forward to launch a robust mechanism that will allow the government to monitor all digital payments that take place in India. Prasad also informed that the meeting that he arranged with other officials was all about understanding the existing Internet architecture that Indian banks use for delivering digital banking features.
According to Prasad, once digital payments is successfully implemented in India, the instances of corruption will be greatly reduced in India in addition to adding transparency in financial transactions that take place in the country.
Ravi Shankar Prasad Speaks of BHIM App
The Minister took the opportunity to speak about BHIM app. It was UPI app that was launched back in December 2016 and has already garnered a massive user base of 1.72 crores. Prasad disclosed some important data about Bharat Interface for Money (BHIM). As per Prasad, since BHIM app was launched, the app clocked transactions worth INR 958 crores. Of this, February 2017 alone clocked INR 595 crores.
Ravi Shankar Prasad may actually meet with senior officials of all banks after March 13, 2017 (Holi) to figure out the options available for moving 35% of the savings bank accounts in the spectrum of Internet Banking.
According to a senior official in the Ministry of Electronics and Information Technology, everyone is required to provide a mobile number when they open a savings bank account. It is this number that can be used for providing mobile banking or Internet banking facility to every individual. According to the official, this is precisely what Mr. Prasad wants.