CAIT suggests constitution of board for digital payments

Confederation of All India Traders (CAIT) on Monday said it has suggested the government to constitute a Digital Payments Promotion Board comprising senior government officials, representatives of different verticals of non-corporate sector including trading community and payment technology providers, banks and other financial institutions.

The idea is to intensify steps to encourage more and more people to adopt digital payments and to monitor digital payment landscape in the country.

With PM Narendra Modi laying emphasis on adoption of digital payments in the country, CAIT has suggested the government to constitute a Digital Payments Promotion Board comprising of senior government officials, representatives of different verticals of non corporate sector including trading community and payment technology providers, banks and other financial institutions, it said. Currently various organs of the government are promoting digital payments in one way or the other. However, a comprehensive policy for promotion of digital payments is need of the hour and as such the proposed Board can act as a catalyst in ensuring faster adoption of electronic payments in the country, it said.

Hailing announcements made by the Prime Minister for providing relaxation in banking facilities for small traders and small industry, CAIT said that it shall promote easy lending by banks and will certainly bring informal economy to formal economy to a large extent.

The initiative of PM would encourage small traders to borrow money through banking channels and would also encourage acceptance of payment through digital mode of payment. CAIT opined that PM’s announcement has set tone of the Union Budget to be presented next month.

The Credit Guarantee Corporation is used to guarantee loans to traders upto Rs 1 crore. Now, the Prime Minister has announced to increase this guarantee limit to Rs 2 crore which means now small borrowers will not be required to give collateral security for credit limits upto Rs 2 crore.

“Collateral security is one of the major deterrent for small merchants in availing funds from banks and financial institutions,” CAIT national president B C Bhartia and general secretary Praveen Khandelwal said.

“This will make small traders eligible for availing credit from banks. Huge cash will come as working capital in retail market,” they said. 

However, it is a fact that banks are reluctant in advancing loans to small businesses for unknown reasons which is the major cause for low level lending by banks to non corporate sector.

Therefore, CAIT has demanded that Reserve Bank of India (RBI) should check all the loans given to small traders to verify whether banks have taken collateral security from them or not. It has further demanded that RBI should also conduct audit of all such loan applications to ensure that PM’s initiative is implemented in letter and spirit, it said.