As the government seeks to promote digital transactions, Finance Minister Arun Jaitley today exuded confidence that the charges on such payments would come down with the increase in volumes.
He said the Reserve Bank of India (RBI) is working to fix the Marginal Discount Charges (MDR) for debit card transactions above Rs 2 lakh. "RBI is deciding on this....this is work in progress. I am sure as volumes (of digital transactions) are increasing, the charges will come down," the Finance Minister told members of the Rajya Sabha.
Jaitley said that under the Payments and Settlements Act, the RBI has held that for cash transactions up to Rs 1,000, the MDR rate would be 0.25 per cent while for transactions up to Rs 2,000 it has been fixed at 0.50 per cent. He said that for transactions above Rs 2,000, the RBI is considering the rate to be applied and this is a "work in progress." Jaitley also said the rate for debit card transactions in petrol companies, the charge is being absorbed by oil companies, while it is being absorbed by the government for digital transactions for rail travel. Newer technologies are making digital transactions cheaper and it is expected that more people would move towards them, he said, adding that the government has also advised its officials to use digital money.
Jaitley said the RBI had begun printing the new currency well in advance but it was the process of recalibration of ATM machines that took time. Recalibration could not be done in advance for reasons of secrecy, he said. He was asked as to why the government had issued Rs 2000 notes if the aim to discontinue the Rs 1000 and Rs 500 notes was that people were hoarding cash, reports PTI.
The Finance Minister said demonetization was one of the steps that the government has taken to curb the menace of black money and there have been many others right since the government took charge, including the formation of a SIT to tackle this problem. He also said that the government has taken steps to ensure that round-tripping of black money through some countries can be curbed.