Uttar Pradesh has marked an extraordinary leap in digital transactions, showcasing an impressive threefold increase in speed over the course of just one year. Over a five-year period, the state has witnessed a six-fold acceleration in the adoption of digital banking by its residents, securing the fourth position nationally in per capita digital transactions.
Uttar Pradesh has now surpassed states like Karnataka, Rajasthan and Madhya Pradesh as per the DigiDhan dashboard of the Central government. The per capita digital transaction in UP is 7.73 while it is 17.68 in Andhra Pradesh, 12.42 in Haryana and 9.31 in Delhi.
Remarkably, even as digital transactions surged, there has been a simultaneous rise in cash transactions, effectively doubling after the aftermath of demonetisation. According to data from the State Level Bankers Committee, the tally of digital transactions in UP soared from Rs 426.68 crore last year to an impressive Rs 1,174.32 crore this year, surpassing the growth witnessed during the challenging period of the COVID-19 pandemic.
The rapid advancement in digital transactions in Uttar Pradesh is attributed to several factors, including the widespread availability of digital banking, improved internet connectivity in rural areas, increased financial literacy and a sufficient number of transaction devices. To bolster the shift towards cashless transactions in the post-COVID-19 era, banks are placing special emphasis on Aadhaar and Rupay card-based deposits and payments, according to the State Level Bankers Committee.
Banks across all districts in the state have launched customer-centric campaigns, promoting various digital transaction methods such as mobile banking, UPI, BHIM app, internet banking and debit cards. The concerted efforts have yielded positive results, significantly increasing the number of people engaging in digital transactions across Uttar Pradesh.
In a targeted initiative, a special campaign was launched in eight digitally backward districts – Bahraich, Balrampur, Chandauli, Chitrakoot, Fatehpur, Shravasti, Siddharthnagar and Sonbhadra. The outcome revealed that Fatehpur, Chitrakoot and Sonbhadra achieved success rates, on average, twice the set targets, indicating the effectiveness of such localised campaigns.
Contrary to the rise in digital transactions, the Reserve Bank of India (RBI) reports that there has been no reduction in the printing of currency since demonetisation. Cash continues to circulate in ample quantities in the market, with a cash flow of approximately Rs 33 lakh crore until September this year. Notably, Rs 25.81 lakh crore of this total is in the form of Rs 500 notes alone. After demonetisation, in the fiscal year 2017-18, about Rs 17 lakh crore was in circulation, with Rs 7.70 lakh crore worth of Rs 500 notes. The sustained availability of cash indicates a coexistence of both digital and cash transactions in the state.
BOX
State Per Capita Digital Transactions (According to DigiDhan Dashboard)
Andhra Pradesh: 17.68
Haryana: 12.42
Delhi: 09.31
Uttar Pradesh: 07.73
Maharashtra: 06.94
Karnataka: 06.53
Rajasthan: 02.30
Madhya Pradesh: 02.10
