Govt Eases Payment Norms, Co-op Banks Get Cash for Loans to Farmers

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Demonetisation has been attracting a fair share of criticism since its imposition two weeks ago.  The move to curb black money and corruption and promote cashless transactions has led to hardships for a vast majority of the Indian citizenry who depend on hard cash to make ends meet, especially in the hinterlands where access to banks and ATMs is restricted.

The government has tried to ease the situation with some measures. The government has extended the time allowed to change the old notes, done away with toll tax and recapitalised district central cooperative banks (DCCBs) to provide winter crop loans to small and marginal farmers.

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On Nov. 23, the Reserve Bank of India (RBI) barred the use of demonetised Rs. 500 and Rs. 1000 currency for Public Provident Fund, Post Office Savings Schemes, National Savings Certificates, Senior Citizen Savings Scheme accounts and Kisan Vikas Patra. On Wednesday, however, the finance ministry announced that old currency can be used to make deposits in post office accounts.

The National Bank for Agriculture and Rural Development (NABARD) announced that it will provide DCCBs with Rs. 21,000 crore to help with loans to farmers. More than 40 per cent small and marginal farmers get crop loans from cooperative institutions.

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Economic Affairs Secretary Shaktikanta Das said, “Both government and some private sector banks have agreed to waive service charges on online transactions through their debit cards till 31 December to promote digital transactions.”

The RBI increased the monthly transaction limit from Rs. 10,000 to Rs. 20,000 for individuals to promote cashless transactions. Similar enhancements have also been made for merchants. The National Payments Corp. of India has already waived switching charges for RuPay cards.

“Other private sector banks are expected to do likewise. Consequently, the transaction charges— including the charges for switching services—stand waived till 31.12.2016. Together, these steps will improve the acceptance of debit cards at different establishments,” added Das.

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Indian Railways, who charged a nominal service charge, have decided to waive it off. “This will facilitate and encourage passengers to buy e-tickets instead of across the counter purchase through cash,” Das said.