The Reserve Bank of India has published a draft policy and has called for feedback from the public before 28-2-2013. The
policy aims to strongly discourage the use of cheques in favour of
electronic cash transfer. It also aims to encourage the use of debit
cards in ATM machines for cash withdrawals. In other words, the new
policy aims at replacing "paper" banking by e-banking. Mysore Grahakara
Parishat has submitted the following feedback.
Experts in cyber-security believe that e-banking in India
carries high risk and is unsafe. It is estimated that more than Rs. 8000
crores are lost every year due to e-banking frauds. It is surprising
that RBI is promoting these high risk transactions. Several committees
have given their reports on how to make e-banking safe, but their
recommendations have not been implemented. It would have been better if
the RBI had taken steps to make e-banking safe and then published the
present policy paper. Another issue is that the laws concerning cheques
(such as the Negotiable Instruments Act) are time-tested while laws on
e-banking are still nascent.
Experts point out that UK also considered a similar policy and
proposed phasing out of cheques by 2018. But strong opposition from the
public forced the government to drop the idea. Experts also say that if
cheques are discouraged, persons who are using cheques may switch to
cash transactions rather than e-transactions and this might aggravate
the problem of fake currency.
In a policy paper, one would expect a discussion of both the
positive and the negative effects of the proposed policy. This would
enable the policy-making body to come to a rational and balanced
conclusion. But the RBI policy paper lists only the benefits of
replacing paper banking by e-banking. It is no wonder that the proposed
policy is skewed in that direction.
Asha Vombatkere, Secretary, Mysore Grahakara Parishat