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Demonetisation: New currency notes to boost electronic payments

Prime Minister Narendra Modi’s move to replace current high-value currency notes with new ones to fight black money issue would,…

Demonetisation: New currency notes to boost electronic payments

(Photo: Getty Images)

Prime Minister Narendra Modi’s move to replace current
high-value currency notes with new ones to fight black money issue would,
perhaps, provide a major boost to electronic payments and dent
unaccounted black money.

“If most of the black money is brought into bank accounts or
into the tax net, there will be far less reason to deal only in cash, and far
more reasons to transact through electronic payments,” NASSCOM
president R Chandrashekhar said on Wednesday.

Welcoming the move, the National Association of Software and
Services Companies said, “This move is a masterstroke that will make a
major dent on unaccounted or black money, rendering it valueless unless it is
taken to a bank to be exchanged, potentially bringing it into the tax net”.

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“It will also accelerate the push toward electronic payment,
which presently has relatively little penetration in India, where cash accounts
for 78 per cent of all transactions by value according to the Reserve Bank of
India (RBI)” it added.

Talking about e-commerce, the statement clarified that the
move will reduce logistic cost which arises due to cash on delivery (COD).

In a surprise move, Modi on
late Tuesday  declared a decisive war against black money and
announced that high denomination notes of Rs.500 and Rs.1,000 will no longer be
legal tender.

“New notes of Rs.2,000 and Rs.500, with completely new
design, will be introduced,” Modi said in his address to the nation. 

 

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