All payments over Rs 5,000 to be done electronically: FinMin tells departments

The Finance Ministry said on Monday that any payments by government departments to suppliers, contractors, grantees and loanees will now have to be made by electronically, in yet another push towards cashless transactions in the country. 

The Finance Ministry said, "Any payment above Rs 5,000 to suppliers, contractors, grantee/ loanee institutions, etc by government departments to be made through e-payments."

The Finance Ministry said it had directed all the ministries and government departments to ensure it is followed. To attain the goal of complete digitisation of government payments, the ministry has lowered the threshold for making such payments from Rs 10,000 to Rs 5,000, it said in a statement.

The government de-legalised the use of Rs 500 and Rs 1000 notes on November 8, in a bid to clampdown on black money and move towards a cashless economy. While the finance ministry has instructed PSU and private banks to waive the transaction cost for all payments made through debit cards, the road transport ministry has asked vehicle manufacturers to provide a digital tag on all new cars for e-payments at toll plazas and checkposts.

Economic Affairs Secretary Shaktikanta Das had last month said all government offices have been asked to use only digital payment method for making payments to stakeholders, contractors and employees.

(With PTI inputs)