Cheque books to be banned? Modi govt’s next push for digital transactions after note ban

New Delhi: After the big disruption of demonetization, Narendra Modi led government might now be working on another disruptive step to boost digital transactions — banning the cheque book.

A senior functionary of the Confederation of All India Traders (CAIT) said that the Centre might withdraw the bank cheque book facility in the “near future” to encourage digital transactions.

“In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions”, said CAIT Secretary General Praveen Khandelwal.

Khandelwal was talking to reporters at the launch of ‘Digital Rath’, a joint initiative of the CAIT and Mastercard to encourage traders adopt different modes of digital transactions and promote cashless economy.


Demonetisation which affected almost every Indian right from poor labourers to big industrialists was a big disruption. Now, the withdrawal of the cheque book facility could have a massive impact as well.

Most business transactions are conducted through cheques. According to experts, 95 per cent transactions currently take place via cash or cheques. Since cash transactions have declined, transaction by cheque have increased after demonetization.

Cheques are fairly popular in small and medium-sized enterprises as by taking a PDC (post-dated cheque) against the delivery of goods, a supplier secures payments due in future from its customer. Normally people pay by cheques while buying land and house, too.

Since November 8, 2016, digital payments like BHIM have grown. However, they are popular for small-value payments (two to three figures). The retail and commercial payment usage strongly suggests that cheque is a very compelling method of payment for large-value payments (four figures and above).