E-transactions grow, cheque usage drops 5 percent
By siliconindia | Friday, 28 August 2009, 06:36 Hrs
Bangalore: More people have started preferring the electronic method of fund transfer against cheque transfers, the latest data suggests. According to a Reserve Bank of India (RBI) data, the number of cheques processed in 2008-09 fell five percent after growing at seven percent and 11 percent in the previous two years. The RBI annual shows that 1.14 billion cheques were processed in 2008-09, using Magnetic Ink Character Recognition (MICR) compared to 1.20 billion in 2007-08. The economic downturn was also another reason for lower volume of cheque usage, said the RBI. Some of the other data shows the increasing adoption of electronic fund transfer through retail electronic transactions, which grew by 28 percent to 280 million in 2008-09. Even, Real Time Gross Settlement (RTGS), an electronic means of transferring funds of over 1 lakh, saw a 27 percent growth in transactions in 2008-09 to 35.2 million from 27.7 million in 2007-08. The RBI has extended the waiver on charges for processing electronic payments product for a period of one year up to March 31, 2010, to encourage more electronic payments. In addition to the electronic transactions, the use of card-based payments also rose by 22.3 percent in volume and by 19 percent in value during 2008-09 mainly due to growth in debit card transactions. According to RBI, a notable trend in the context of the economic downturn was that while the growth in value of credit card transactions decelerated in 2008-09, the growth in the value of debit card transactions continued to remain strong as in previous years. After facing heavy losses on their credit card portfolios, banks canceled inactive cards and went slow on new issuances in 2008-09. Credit card transactions grew 13.7 percent in 2008-09 in volumes compared to 34.6 percent growth seen in 2007-08. Its value grew 12.7 percent in 2008-09 compared to 40.2 percent previous fiscal. However, the debit card transactions grew 44.6 percent in volumes in 2008-09 compared to 46.7 percent in 2007-08. The value of debit card transactions grew 48.1 percent in 2008-09 compared to 53.2 percent over last financial year.