End Of Paper Money: Why Physical Cash Has No Future?

Mukunda Tripathee

Among the industries, Banks & Financial Institutions (BFIs) have been using more and more technologies in their services. BFIs are introducing different services through digitization. They are encouraging their clients to perform their banking activities through an electronic medium.

The government has also been discouraging people to use physical cash. To maintain transparency in financial transactions and control the conversion of black money into white money government through budget encourage/emphasis to do online transactions.

In Nepal, there is no provision for sanitizing paper money. Thus, it could be a source of transferring viruses and different kinds of diseases from person to person.

The government has been investing/wasting huge amounts each year for releasing paper money which is very costly and is a financial burden to the nation. BFIs and NRB have to invest a huge amount to manage different resources to sort out and manage old and torn money day by day.

Similarly, keeping and taking money is being very risky, which might be stolen, lost and may invite different kinds of unexpected accidents.

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Initiations For No Paper Money

It is quite essential to replace paper money with plastic money and through digital transactions.  Thus, online payment for application and exam fee by Public Service Commission, good for payment (GFP) cheque for ownership transfer of land and building, no more than one million cash from BFIs, cheque system for sizeable government tax payment, etc. are some initiations for paperless money’ transactions.

Gradually, utility payment services have been also digitizing. online payment organizations like Khalti, eSewa, IME PaY, Ipay, Parbhu Pay, etc. have been providing and encouraging online payment systems to make payments for different services.

Departmental stores, hospitals, hotels, supermarkets, restaurants, fruits and vegetable markets, etc. have been using POS machines, credit cards, quick response codes (QR codes), phone pay, internet banking, and so on. Which have been significantly reducing cash transactions and the physical presence of a person to make and carry out transactions.


As of mid -November 2020, 27- commercial banks “A class institution”, 19- development banks “B class institution”, and 21-finance companies “C class institution” have been mobilizing Rs. 4,117 billion deposit and Rs. 3,445 billion credit through 33,531,787 deposit accounts and 1,557,277 credit accounts.

Likewise, more than 11.91 million customers have been using mobile banking. Similarly, more than one million customers have been using internet banking, more than 7.66 million debit cards, 168 thousand credit cards, and 58 thousand prepaid card holders are there for plastic transactions and digital transactions.

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Electronic Payment Transactions-As of Mid-Nov, 2020

(Based on Four Month’s Data Ending Mid-November, 2020/21) 

S. No Particulars No of transactions
1. RTGS 34765
2. ATM cards withdrawals 6016320
3 ECC 877695
4. IPS 654918
5. Connect IPS 1028037
6. Debit cards 6650567
7. Credit cards 141333
8. Prepaid cards 5760
9. Internet banking 221405
10. Mobile banking 7643296
11. Wallet 9749707
12. QR based payment 241818
13 Point of sales (POS) 668319
14. E-commerce 112706

The above data depicts that, the number of users of digital banking has been significantly increasing. Everyone is equally responsible for minimizing cashless transactions. Everybody shall enforce to perform digital transactions and in order to minimize the uses of physical cash.

(Mr. Mukunda Tripathee is currently working in the banking sector.)

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