Digital payments have increased manifold after demonetisation came into effect two years ago. It may be recalled that the government had withdrawn currency notes of ₹500 and ₹1,000 on November 8, 2016, which created a cash crunch that continued for more than a year in different parts of the country. As per data available with the RBI and National Payments Corporation of India (NPCI), the increase in digital payments has been profound in popular channels such as National Electronic Fund Transfer (NEFT) and mobile banking between September 2016 and September 2018.

The value of NEFT transactions had gone up from ₹988,000 crore in September 2016 (just two months before demonetisation) to ₹14,182,000 crore in September 2017, and to ₹18,015,000 crore in September 2018.

The value of mobile banking transactions, too, shot up from ₹2,700 crore in September 2015 to ₹104,300 crore in 2016, and to ₹186,200 crore in 2017.

“If one includes all digital transactions, there has been a 440 per cent increase since demonetisation,” R Prabhu, Managing Director & Group Chief Executive Officer, Payswiff, told BusinessLine . This growth has been driven by Tier II and Tier III markets, which mostly stayed away from digital transactions before demonetisation, he added.

Demonetisation may be history now. But the trend of increased use of alternative channels in banking has been continuing. SBI has also reported a 502 bps increase in the share of alternative channels at 83.47 per cent as on September 2018 against 78.45 per cent in the year-ago period. In individual segments, internet banking has shown faster growth.

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