Government contemplates reviving invalid RuPay debit cards

Mumbai: Intending to bring some relief in rural areas after demonetisation, the state government has said that the Centre is soon going to revive invalidated RuPay debit cards, introduced while opening Jan Dhan accounts. Such cards became invalid since users did not use it earlier. However, after demonetisation, the Centre is planning on making the cards valid again to push for a cashless economy. Economic experts favour a cashless economy, but point out that there is a lack of infrastructure in rural areas for debit or credit cards to be used.

The Centre was slammed for not allowing financial transactions in district cooperative banks after demonetisations, which has paralysed the rural economy. In order to bring some relief, the state government said that the Centre would be taking measures to ease the stress. “We have been informed that that the Centre would be validating RuPay cards offered while opening Jan Dhan accounts. The cards became invalid as nobody used them. But now, the Centre is likely to validate them for cashless transactions in the rural areas,” said a senior official from the state government.

RuPay is an Indian card, like Mastercard and Visa cards, and was launched by National Payments Corporation of India. The card was distributed as a part of the Pradhan Mantri Jan Dhan Yojana.

However, Dr Vinayak Bhise, a professor of Economics from Dr Babahsabe Ambedkar Marathwada University, said that basic infrastructure, such as electricity, is not available in rural areas for debit cards to be used. “Going cashless is a welcome move. But where is the required infrastructure? One cannot force a cashless economy on the people. Also, demonetisation had some other intentions, like dealing with black money. But when the situation is getting worse in the absence of cash, the government is talking about a cashless economy. There is no plan for that and everything is ad hoc. The people need to have accounts in banks first and maintain minimum balance to go cashless,” he said.

The general secretary of the Maharashtra State Bank Employees Federation, Vishwas Utagi, added that banks don’t have the requisite technology for a cashless economy. He also raised the issue of security when it comes to e-money, pointing out that 30 lakh debit cards came under threat recently after a financial fraud.

“We support a cashless economy. But the question is, are we prepared for it? The banking network is poor, the unified payment system will be upgraded in 2018, and only five nationalised banks have their own apps. We will not be able to go cashless with so many hurdles,” Mr Utagi said.

Counting the numbers:
Jan Dhan accounts and distribution of RuPay cards in Maharashtra till November 23, 2016
Rural accounts               80,37,422
Urban accounts              79,11,449
Total Accounts             1,59,48,871
Deposits in crores (in Rs)     4,147
Aadhar seeded            1,17,68,560
Zero balance accounts   46,16,795
RuPay cards issued     1,24,43,000