Banks must continue to play an important role in supporting India’s economic growth, Finance Minister Arun Jaitley said on Monday, adding that digitisation will go up in the near future.
“Excessive dependence on cash has its cost. It is not just cost but it is a curse on society and economy,” Mr. Jaitley said, while speaking at a Punjab National Bank event two days before the first anniversary of the government’s demonetisation of high-value currency notes.
“There is a clear subtle change of how Indians now spend their money. That is the only direction.”
Prime Minister Narendra Modi had on November 8, 2016 announced the demonetisation of ₹500 and ₹1,000 notes effective from the midnight of that day.
The Union government has since then been pushing for a less-cash economy by introducing various incentives to spur electronic transactions.
On cash-less path
“It will not happen abruptly but the movement towards a less-cash economy is very clear,” Mr. Jaitley said, adding that such a system would result in more deposits with banks, increasing their ability to lend at affordable rates.
“Banking is the lifeline of the economy and it will gain further importance in the coming days,” he said. “A healthy banking system will help support growth of the economy.”
The Finance Minister also congratulated Punjab National Bank for its recent financial performance, in which it reported a 65 per cent sequential growth in net profits in the second quarter.