Amid Economic Slowdown, Finance Minister Nirmala Sitharaman on Saturday held a meeting in New Delhi with heads of public sector banks (PSBs) in order to revive the economy which is going through its worst time. After reviewing the meeting, the Minister asked public sector banks to clear pending vigilance cases against their officials for alleged malpractices.
Many decisions were taken during the meeting chaired by Sitharaman. Finance Minister spoke to journalists after meeting leaders of state-owned banks ahead of her Budget speech in February. She said, “No Merchant Discount Rate (MDR) charges will be applicable on select mode of payment from January 1. The modes of payment will be notified soon.”
“Genuine bonafide decisions are not being made by banks because of fear of what banks call undue harassment. No case goes to CBI without banks deciding to send it there,” the Minister added.
“I, therefore, propose that the business establishments with annual turnover more than Rs 50 crore shall offer such low-cost digital modes of payment to their customers and no charges or Merchant Discount Rate shall be imposed on customers as well as merchants.
“RBI and banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment,” she said.
“RBI and banks will absorb these costs from the savings that will accrue to them on account of handling less cash as people move to these digital modes of payment,” she further said.
When India is in the midst of a significant economic slowdown, this meeting may bring relief all around. To revive the economy, the government needs to meet long felt need. According to government data, India’s economy grew at its slowest pace in more than six years in the July-September period, down to 4.5 percent from 7.0 percent a year ago.
The RBI has instructed to cut rates by 110 basis points to a nine-year low of 5.40 percent. On the other hand, the government has taken several steps from cutting corporate tax in September to boost investments.