Popularize E-payments to bring down the Number of Transactions through Cheques.

The Department of Financial Services-Ministry of Finance-Government of India, over the years has encouraged banks to focus on ePayments. This will reduce expensive modes of remittance transactions viz Cheques, etc.

Though Public Sector Banks have upgraded their Core Banking Platforms to initiate ePayments, there has not been significant jump in the number of ePayments vis-à-vis the cheque based transactions.

As per RBI statistics, during 2001-12, the number and value of cheque transactions was 134 crore and Rs.98,94,000 crore respectively. During the same period the number and value of electronic transactions was 1160 crore and Rs.22,07,500 crore respectively.

In value terms, the share of ePayments is 18%. In number terms, cheque transactions have declined marginally only by 4%.

View the latest RBI cheque clearing statistics here

See the cost involved in processing cheques/pay orders/demand drafts


Step No Description Estimate(Rs)
01) Processing Unit, raises the Indent 0.50
02) Indent is received by Printing and Stationery


03) Indents from various Departments are pooled 1.00
04) Indent is placed with the approved

Security Printer

05) The Indent is processed i.e Pay Order/Demand draft is printed, as per the Banks request 20.00
06) Pay Order/Demand draft are received at the Banks P&S Department

And are stored

07) Pay Order/Demand draft are despatched to the respective processing


08) Pay Order/Demand draft are received at the processing unit, and stored

till indented by the customer/bank staff

09) Periodical Stock Verification 1.00
10) Auditor Stock Verification 1.00
11) Pay Order/Demand draft issued on request 2.00
12) 1 in 100 Pay Order/Demand draft is damaged and has to prepared afresh 1.00
13) Pay Order/Demand draft received in Clearing-clearing house charges 2.00
14) Pay Order/Demand draft is processed at the cheque processing centre 10.00
15) Exception handling 5.00
16) Storage charges at the cheque processing centre 2.00
17) Storage charges at the old records cell(.50 X 8 years) 4.00
Grand Total 56.00


The total cost of handling cheques by the Public Sector banks is estimated to be Rs.4,000 – Rs.8,000 crore.


As the Finance Ministry can motivate PSB’s to migrate to ePayments, especially in relation with their transactions with their customers.

The PSB’s have been advised the Department to use only, only ePayments for the following types of transactions, vide Notification No. F.No.15/2/2012-FI  dt. June 21, 2012 :-

i.    All payments to and from customers / staff

ii.    All payments to vendors and suppliers

iii.    Disbursement of loans and payments towards installments and investments.

iv.    ECS advice instead of post dated cheques


The deadline is 1st July 2012. The department has further advised the Head Offices to adopt a carrot and stick policy.

a)      Immediately, the top 20% branches in terms of business volume may be identified and action plan to bring the number of cheque based transactions by at least 20% in 2012-13 be worked out.

b)      Banks have been advised to reduce the charges for NEFT transactions to zero for value up to Rs.1 lakh.

c)       Customer meets with focus on the ePayments demos might be organized.

d)       Banks also need to proactively encourage their customers to adopt e-transactions in their dealings, viz., payment to suppliers, staff.

e)      Migration to ePayments to be one of the parameters for incentives to the Branch and Regional / Zonal level.

f)        As the RRBs have recently migrated to Core banking, and have joined the payment system, there is a need to educating the staff of RRBs on electronic payment and to also undertake a more intensive customer awareness campaign.

g)       The Board of Directors to monitor the progress there under on at least a quarterly basis.



The PSBs / RRBs are to inform this Department on the progress of ePayments and the reduction in cheque based transactions on a monthly basis, only through email at fi-dfs@nic.in.

Well, it has been 2 months since the Department’s advise and Banks would have issued internal guidelines to boost ePayments.


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