By IANS,
Mumbai : The Reserve Bank of India (RBI) has taken measures to promote the use of cashless payment instruments in the country, a senior official said Thursday.
“The RBI has been in the forefront both as operator and facilitator for promoting the use of cashless payment instruments in the country,” RBI Deputy Governor H.R. Khan said at a conference organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Banks’ Association here.
“The technology implementation in banks which have shaped the payment system in turn is largely driven by the recommendations of the various committees set up by RBI,” he said.
Khan said the development of payment system in the country depends on various issues including the adoption of technology, introduction of new payment instruments and the confidence of the public in using these payment instruments.
In India cash still continues to be the predominant payment mode. This can be gauged from the fact that value of bank notes and coins in circulation as a percentage of narrow money is very high at 60.07 percent for the year 2009-10 as compared to 18.51 percent in South Africa, 18.83 percent in China and 39.14 percent in Mexico.
Narrow money includes all physical money like coins and currency along with demand deposits.
“This is a pointer that we have been relatively slow in embracing cashless payment modes and using them as cash substitute,” Khan said.
“The pre-dominant use of cash could also be attributed to the fact that the process for adoption of non-cash mode of payments started relatively late in the country,” he added.