A special meeting of J&K SLBC to discuss implementation of Digital Banking Programme in J&K State was held today at Jammu.   The meeting was presided over by Dr. Haseeb A. Drabu, Hon’ble Finance Minister, J&K State and the agenda was steered by Mr.Parvez Ahmed, Chairman & CEO, J&K Bank (Convenor, J&K SLBC). 

The meeting inter-alia was attended by Mr. Pramod Jain, Financial Commissioner, Agriculture Production Department, Mr. Lokesh Dutt Jha, Financial Commissioner Revenue, Mr. Navin Kumar Chowdhary, Commissioner/ Secretary Finance, Mr. N. K. Sahu, Regional Director, Reserve Bank of India and other senior functionaries of RBI, NABARD, Telecom Operators, banks and financial institutions operating in the State.

Speaking on the occasion Dr. Haseeb A. Drabu, Hon’ble Finance Minister, J&K State, said that the cash to GDP ratio of the country hovers around 13% which is almost double the globally accepted standards of 6-7%.  In J&K this ratio is still higher at 20-22% of the SDP even when compared with the like-to-like economies of other states.  Attributing the same to socio-economic and historical perspectives of the State he said that the people of the State are conventionally in the frame of having stocked currency. However, in the contemporary circumstances, the uncertainty in the economy of the State due to bandhs, curfews, hartals etc., has called for re-adoption of such habits among the people. However, these parameters set the context for us to devise specific strategies to deal with the higher percentage of cash in the State economy.

Talking about the technological aspect of the matter, he stated that it should be looked at as an enabler to reduce the cash in the system and our focus should be on the macro as well as micro level transition in socio-economic and cultural set up of the state. Stressing the need for developing customized strategies he stated that the Government and the banks operating in the State must work in coordination to develop trust among the people to use the alternative channels offered by the banking system to transact their businesses.

Accentuating the role of banks in implementation of Digital Banking in the State, Dr.Drabu said that banks, especially J&K Bank with its huge footprint, having developed a lot of trust and credibility among the masses, should come up with a brand to popularize cashless modes of transaction in the State and other banks to supplement. He stated that though the convenience is the biggest inherent incentive in the digital banking, banks should look into incentivizing the use of alternative channels so that the footfall at the branches is reduced. 

Emphasizing the role of Aadhaar Enabled Payment System (AEPS), the Finance Minister stated that this system has a huge potential and can go a long way to achieve the envisaged objective of cashless economy in the State. Banks should focus on motivating people to seed their Aadhaar numbers with their accounts.  He also said that banks besides deploying more and more PoS machines should assign importance to devising strategies for identifying the pockets and touch points, which have huge cash inflows, so as to optimize the use of PoS machines in the system to reap the benefits.

On the part of Government Dr. Drabu stated that the State Government is planning to take the e-Governance to the panchayat level, which will concurrently promote digital banking in the rural economy, for which the State Government is contemplating to digitize 100 panchayats in the State in the first phase. Maintaining that the digital banking system is a sub-set of the larger move of e-Governance, he stated that for efficacious implementation of e-Governance it is imperative that other associated services like revenue, rural development, social welfare etc. should also be compatibly equipped with digital technology to synergize the system.  He also said that the State Government is looking to move forward with further incentivizing online payments on their part besides working to roll out various other services through existing network of Common Service Centres (CSCs) / Khidmat Centres to make them more viable and income generating.

Appreciating the concept of GST (Goods and Services Tax) Dr. Drabu stated that this will prove to be an effective driver for proliferation of Digital Banking, he suggested that banks should explore devising pre-loaded cards, such as Tax Cards, for payment of sales tax besides other fees and fines. To facilitate the process the State Government shall look at upgrading the laws governing the receipts and payments of the Government Departments.

Appreciating the role played by the banks during the demonetization, Dr. Drabu complemented the banking fraternity in the State and expressed satisfaction that despite incidence of cash crunch the process was taken forward in the state smoothly as compared to the position in other states of the country.

Mr. Parvez Ahmad, Chairman & CEO, J&K Bank (Convenor, J&K SLBC), emphasized that banks should work on devising state-specific solutions for promoting digital banking in the State and in this regard we are fortunate to have the presence of Dr. Haseeb A. Drabu, Hon’ble Minister for Finance and Culture, J&K State, with his background, his guidance will enlighten the forum to move ahead on this national objective.  He also emphasized the need and importance of availability of quality telecom connectivity in the State to make the digital banking programme a success. He requested the State Government to consider white-listing all the digital banking URLs and IP Pools in the event of imposing restrictions on the internet connectivity during any turmoil or disturbances in the State, so as to inculcate a sense of reliability among the masses for the digital banking.