MUMBAI: State Bank of India on Thursday said the government should incentivise consumers for moving towards a cashless economy. Apart from making it mandatory to install point of sales machines at all merchant outlets and making PAN mandatory for any cash transactions above a certain limit, the public sector lender said Centre should also consider allowing individuals to deduct a certain portion of the amount spent on digital transaction from their total tax payable.
In a special report on demonetisation, Soumya Kanti Ghosh, SBI’s chief economic adviser highlighted the need for ramping up the digital infrastructure in India. “The government may also look at specifying a certain limit for digital transactions for individuals that could be available for a tax deduction These may be akin to tax rebates given under section 80C,” Mr Ghosh said. The current size of digital banking including credit card and debit card transaction through PoS terminals, transaction through Prepaid Payment Instruments (PPI) like m-Wallet, PPI cards and mobile banking is around Rs 1.2 lakh crores.
According to SBI, this size has to increase from the current level to at least Rs 3 lakh crores. “Keeping the share of each digital channels same at the current level and assuming that the size of digital banking increases to Rs 3 lakh crores, then it is estimated that we may require around 20 million extra PoS terminals,” Mr Ghosh added. He said banks should focus on mobile wallets.
