NO service charges for online card transactions up to Rs 2,000
India, one of the most promising developing nations in the world has attracted lot of economic experts all around the world as current Prime Minister of India took few bold decisions in recent past. The most highlighting one is the demonization for higher Indian currency notes Rs.500 and Rs.1000 following that Mr. Modi who is the current Prime Minister of India conveyed that RBI (Reserve Bank of India) will launch new higher value currency note Rs.2000 with more secured features.
Bold Initiatives Taken by Government of India
While addressing the demonization of Rs.500 and Rs.1000 to the fellow citizens, Mr. Modi also hinted that the process of banning these notes from pubic will makes all black money holders in before the justice. Also this demonization process will leads India’s economy towards new level in near future. Followed by the demonization below listed are the few of bold initiatives taken by the central government of India
- Implementing limitation on cash exchange and cash withdrawal from banks and ATM’s after the demonetization of Rs.500 and Rs.1000. By doing so, black money holders suffers a lot to exchange their holding as all bank accounts and old currency exchanges are monetized by Income Tax department.
- On witnessing the people purchasing gold with their black money, central government implements strong protocols on the existing gold limitations for Indian families and individuals. Also the announcement hinted that raids and other process will initiated over the people and bank account holders who changed or deposited huge amount of money in this demonization period.
- In order to get rid of the black economy, the central government requests people to go for cashless transactions and offered various relaxations for people who performs cashless mode of transactions.
Initiatives taken for Cashless Transaction by Central Government of India
|S.No||Facts and Benefits of going Cashless||Details Information|
|1||Corruption free||Going towards Cashless economy would leads to corruption free society|
|2||Boost Economy||Going cashless would reduce the cost of maintain the paper money by government|
|3||Dethrone of Terrorism & Criminals||Going Cashless would enables easy tracks for finding terrorists and criminals in society|
|4||No Fake Currencies||To be frank, cashless economy is the anti-biotic for fake currencies.|
|5||Eco-friendly||Cashless Economy save lots of trees, which are cut down for making paper cash|
After banning Rs.500 and Rs.1000 rupees notes from public, government suggest people to opt for card transactions in order to avoid finance lock in this crunch situation. In fact, the limitation of money withdrawal from ATMs is implemented in order to drive people towards the cashless transactions.
In addition, current ruling NDA government approves various private sectors to involve in the payment banking sectors. Owing to that, the telecom giant of India Airtel network owned by the Bharti groups started their own Payment banking sector well before the PayTM who expected to launch such services in India earlier.
In order to ease the situation the central government of India offers various relaxations on online mode of payments in fact, central government of India temporarily holds the service charging process for certain period, so that normal people too can avail the benefit of online mode transaction without playing any extra amount as service charges.
Steps taken by RBI (Reserve Bank of India)
Since, the demonization process will hit nation’s inflation ratio, the RBI keen on keep the inflation mark within control. Recently, RBI has reduced its interest amount for money investment features offered by the nationalized banks in order to increase the money floating among the public.
Also, few days before RBI introduced new policy of giving relaxations of getting rid of service charges for lower cash transaction up to Rs.2000 from debit or credit cards.
Relaxed norms announced by RBI for lower transactions up to Rs.2000
On 06th of December 2016, the reserve bank of India announced about relaxing the norms which are carried for authentication process. The experts across the nation widely believed that by implementing this new norms will increase the small value online transactions among the middle class families. Also the impact of this AFA (Additional Factor of Authentication) will be the strong motive to get majority of normal people to get involved in the cashless transactions.
|New Norms applicable only for||Small value transactions up to Rs.2000|
|AFA||Additional Factor of Authentication|
|Limits sent of performing CNP transfers||Rs.2000|
|CNP||Card Not Present|
By introducing such relaxation, the low level merchant will get benefits as it ease the process of payments in cashless mode.
Conditions for the Relaxation in the process of online card Transactions
- In order to avail the relaxation offered by the Reserve bank of India for the lower transactions up to Rs. 2000, the card network must provide such payment authentication solutions.
- The transaction carried above the threshold limit of Rs.2000 set by the RBI wont comes under this new relaxation procedure and it will be proceed with the usual procedures.
- Also, the number of such easy mode of low cash transfer can be limited by the card network. The limitation may be fixed upon daily basis or weekly or monthly, it’s fully up to the card network.
In the recent statement released from the RBI has clearly quoted that the respective banks and card issuing authority have their own rights of restricting their own customers by using such ease mode of AFA in terms of number of usages in a certain fixed time period.
What to do? For avail this AFA
Customers need to register at one time with the merchant with their card details and thereafter for every purchase made from the respective merchant would not requires card to pay the amount. With such additional factor of authentication, customers can able to do card less transactions also it helps them to save their precious time.
This process of introducing AFA for lower cash transactions with merchant is highly welcomed by various merchants and publics. In fact, the Uber president Mr. Amit Jain welcomes the move taken by the RBI by quoting as the government’s new policies are in right directions to encourage the citizens to enjoy the benefits of using cashless economy.
With such useful and strong initiatives taken by the current central government led by Mr. Narendra Modi, it is assured that people of India would able to avail more and more benefits from the latest technology. And the India is moving in the right path of achieving the goal of Digital India which is set by the current Prime Minister of India, Mr. Modi.