India’s Ministry of Finance has passed regulation mandating that all governmental ministries to make payments above INR25,000 (USD485) electronically, replacing cash and cheques with transfers direct to recipients’ bank accounts.
A spokesperson for the Ministry of Finance told Electronic Payments International that: “Orders have been issued and all payments above INR25,000 to suppliers, contractors and individuals must be directly credited to their bank accounts”
Civil servants, though, are entitled to opt out of e-payments for salary payments. “Government employees can continue to receive their salaries by cash or cheques,” the spokesperson confirmed.
This option, however, only applies for wages, with all other payment above the INR25.000 threshold to be processed through the Government e-payment gateway (GePG).
By expanding electronic payments, the Ministry of Finance expects to bring about increased transparency and promote good governance in the public sector.
Following the Ministry of Finance’s lead, one local government body – the Municipal Corporation of Bhubaneswar – has also announced that all of its payments will be made online.
The nearly two million citizens of Bhubaneswar, capital of the Indian state of Orissa, will now be able to trace all payments made the municipality online.