Indian state-owned banks are to migrate to e-billing from
September on.

In attempt of speeding up the process of checking risk of funds
transfers’ corruption, the Union finance minster of India has
ordered state-owned banks and financial institutions to only make
payments electronically from September on.

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The new step towards e-payments means banks
are no longer allowed to process cheques in order to check
corruption in transactions.

The ministry took the decision as part of an
e-governance initiative, arguing that paperless fund transfers can
avoid risk of irregularities in payments made by cheques.

A ministry official said in a statement that
disbursal of funds through cheques often gave rise to corruption
and that the payment to the beneficiary would often get
delayed.

The ministry added that there had been
instances where a cheque was not issued on time or the payment had
not reached the beneficiary. The migration to e-payments will
address all those issues, the ministry said.

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That way, unbanked people can receive payments
via means other than bank accounts.

Bank executives agreed with the ministry’s decision that
e-transfers would reduce the risk of corruption as money would be
passed without any human intervention.

In a statement by Punjab National Bank’s chairman and managing
director, K.R Kamath favoured the move towards e-payments he said:
“E-payment will be good for both the beneficiary and the remitter.
It will ensure smooth and speedier flow of money. At Punjab
National Bank, we are already using this for all kinds of
payments”.