As People Ditch Cash for Digital Payment in Covid-19 Era, Banks Issue Over 1.6 Crore New Debit Cards

As People Ditch Cash for Digital Payment in Covid-19 Era, Banks Issue Over 1.6 Crore New Debit Cards

Digital Payment: As the sudden outbreak of deadly coronavirus led to social distancing, people ditched cash transaction for the Digital Payment. This in fact led to more than 1.6 crore new debit cards being issued during the lockdown period.

According to a report in The Economic Times, during the peak months of the lockdown, the circulation of cards issued by state-owned banks increased to 59.71 crores from 58.56 crore. For private banks, the circulation of debit cards increased 16.86 crore, even as they issued 40 lakh cards in this period of time.

Citing a Reserve Bank of India (RBI) data, the publication said that the total number of debit cards in circulation increased to 84.54 crores in June from 82.85 crores at the end of the March.

The report, quoting bankers and payment experts, further stated that the increase in the issuance of new debit cards – mostly by public sector banks – could also be due to the central government’s push to expand the coverage of various relief schemes linked to Jan Dhan bank accounts.

Foreign banks, small finance banks and payment banks also issued cards during this period, said the report.

Navin Surya, the chairman emeritus of the Payment Council of India explained three broad reasons behind the spike in the issuance of debit cards.

“One is the pent-up demand since March and April which was reflected when courier services reopened in May. The other reasons are increased demand by customers for contactless cards during Covid-19 and the replacement of redundant cards by public-sector banks,” Surya was quoted as saying.

The addition of 1.6 crore new debit cards between April and June of 2020 is the second-highest over a quarter since banks initiated the replacement exercise in 2018, said the report citing an analysis of RBI data over the last two years.

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