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Excessive use of paper currency detrimental to society: Arun Jaitley

Finance Minister Arun Jaitley on Thursday said excessive use of paper currency is detrimental to society and hoped banking transaction charges will fall with the entry of new players.

Expressing satisfaction that digitisation is expanding at a much faster space than anticipated, Jaitley said transformation of post offices into a bank will be the next revolution. In an apparent reference to criticism of demonetization by opposition parties, Jaitley also said there would have been complaints even before cash or currency was invented and even if it gets eliminated tomorrow. “In the context of demonetization, the obvious attempt was that the extent of the paper currency must be replaced by digitised economy…this expansion is going to take place much faster than any commentators anticipated and the reasons are very obvious,” he said after launching Airtel Payments Bank here.

“People do realise that paper currency and excessive use of paper currency is to the larger detriment of any society.In fact, one of the great advantages of what has been going on is India’s move towards less cash economy,” he said. He also noted that the new generation in India take to emerging technologies and techniques quite easily. Expressing hope that entry of more telecom players in the banking space will help push financial inclusion, he said entry of post offices would add a new dimension.

“If you can have the post offices, I think which is the next revolution waiting to happen, that these 1.75 lakh post offices which are underutilised … are also planning to evolve into a bank themselves,” he said. As more and more telecom companies enter the fray, he said, “I think we will hopefully see competition not only amongst telecom companies which we read a lot about these days but we will probably see competition between conventional and the new mode of banking that you are going to introduce.” When volumes are going to increase, service charges are going to be minimal because the fixed cost remains the same, he said.

With JAM (Jan-Dhan, Aadhaar and Mobile) and increased digitisation, banking costs are going to be minimal in the country, he added. Taking a dig at critics of digital economy, Jaitley said this will provide adequate response to ill-informed criticism that digital space would only be occupied by credit card revolution.