Cheque book ban now will be hastier than GST rollout; India is woefully ill-equipped for full digitisation

The rumour of a proposal to ban cheque use for financial transactions is most likely creating much heartburn among many given the trading community’s dependence on these instruments. Media reports say a decision to this effect is likely in the works as the government wants to give a further push to digitisation of the economy.

If the proposal indeed turns out to be true, it would be a hastier decision than the GST rollout. The goods and services tax (GST) was rolled out from 1 July 2017 with a lot of fanfare amid concerns voiced over lack of dry runs on a large scale and absence of seamless internet connectivity and access across the nation. The result — glitches galore that go beyond teething trouble.


After demonetization and GST, the government wants digital payments to be the norm. Nothing wrong in joining the ranks of Britain and Sweden. But are we ready? If we weren’t ready for GST, we are woefully ill-equipped for digitisation across the nation. The limited digital payments we have witnessed has been by and large confined to urban areas and the mode of mobile wallets used mainly in the daily food basket.

Representational image. Reuters

Representational image. Reuters

Rural folks brought into banking fold have been still hugging cash. In other words, withdrawing from banks and ATMs and then paying the suppliers and shopkeepers remains the nation's preferred option.

In a way, therefore, we will be killing the cheque at its infancy in rural areas where large swathes of India still is.

Let us start digital-payments-only regime in metropolitan branches on a pilot basis if only to send signals to rural folks that the inexorable pace of digitization sweeping the world must be welcomed by them as well.

Putting the nation on notice is what Britain has done. High denomination notes were abolished at a 4-hour notice to catch crooks with their pants down. There was justification for the suddenness but the jury is still out whether the exercise has paid off.

One hopes stealth and haste don’t mark the burial of cheque. Ideally it should be allowed to take roots across the nation before it is buried in the manner of slaughtering a fattened goat.


One hopes the nation has got itself of online payment phobia. Let India become an internet and Wi-Fi sweetspot like Sweden.

Unlike GST, there is no hurry this time around. GST was crying to be ushered in given the inequities and complications in the earlier system of indirect taxation. But universal digital payments can be a leisurely exercise. Everyone must be ready and taken into confidence.

Purchasers of properties including flats should be able to issue cheques and get drafts made from banks.

The government must be complimented for leading from the front and by example by steadfastly insisting on digital payments alone by government departments and government companies which is having a positive impact on large private sector companies as well.


Published Date: Nov 22, 2017 10:23 am | Updated Date: Nov 22, 2017 10:35 am



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