Digital India got a boost during the peak months of the coronavirus-led lockdown as banks issued more than 1.6 crore new debit cards in this period. The number included the up-gradation to chip and PIN cards from the old magnetic stripe variant.
The increase in the issuance of new debit cards – mostly by public sector banks – could also be due to the central government’s push to expand the coverage of various relief schemes linked to Jan Dhan bank accounts, reported The Economic Times citing bankers and payment experts.
According to the later Reserve Bank of India (RBI) data, accessed by the publication, the number of debit cards in circulation increased to 84.54 crores in June from 82.85 crores at the end of the March.
During this period, the circulation of cards issued by state-owned banks increased to 59.71 crores from 58.56 crores, said the report. For private banks, the circulation of debit cards increased 16.86 crores, even as they issued 40 lakhs cards in this period of time, the central bank data stated.
Foreign banks, small finance banks and payment banks also issued cards during this period, said the report.
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Navin Surya, the chairman emeritus of the Payment Council of India explained three broad reasons behind the spike in the issuance of debit cards.
“One is the pent-up demand since March and April which was reflected when courier services reopened in May. The other reasons are increased demand by customers for contactless cards during COVID-19 and the replacement of redundant cards by public-sector banks,” Surya reportedly said.
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The RBI has mandated all banks to replace all existing magnetic stripe-only cards with EMV chip cards. Adhering to the directive, banks have been replacing old and redundant magstripe-based debit cards with the new variant since September 2018, said the report.
The addition of 1.6 crore new debit cards between April and June of 2020 is the second-highest over a quarter since banks initiated the replacement exercise in 2018, said the report citing an analysis of RBI data over the last two years.Follow our full coverage on COVID-19 here.