Case Study of the Indian Banking and Financial Services Industry using Strategic Tools
April 3, 2025
Finance is like Oil to the Engine of the Indian Economy As finance is the grease and the oil that keeps the engine of any economy running, the BFSI sector assumes importance in this context. While the post independence era witnessed many large private banks that were either family or community run as well as…
Governments across the world have stepped up their fight against cash. Cash is being increasingly viewed as a curse that mankind needs to rid itself of. The goal is to move towards a cashless economy. The closer an economy is towards this goal, the more successful it is considered to be. However, the concept of…
The United States is economically the most powerful nation in the world today. This is what makes the study of central banking in the United States all the more interesting. Almost all other countries in the world adopted central banking without any major hassles. However, in the United States, a lot of conundrum took place…
Cashless society is the latest buzzword in global finance. At the present moment, only 15% to 20% of the world’s money exists in the form of currency notes. This itself is an absurdity. However, many central banks and governments all across the world have pledged to bring the cash percentage down to zero. This means that first currency notes were redeemable for gold. This was the gold standard. At a later stage, currency notes could be redeemed for other currency notes making it the paper standard. The next standard will be digital medium wherein digital money will be the only money. The money will cease to be something tangible. Instead, it will simply be notional i.e. money will only exist in the virtual world.
Like the taking down of the gold standard, this move will have extremely long-term implications. We cannot even fathom what this might lead to in the future. However, the act of banning cash would provide near total control to the government, which is a recipe for disaster.
In this article, we will criticize the concept of cashless society. We will make an attempt to understand what can go wrong if digital payments replace cash.
Governments claim that cash is a menace in the hands of the wrong people. Terrorist activities, counterfeiting, etc. are all funded by cash. This is indeed true. However, this is not the true motive behind the introduction of a cashless society. To understand the real motives, we need to be a bit cynical. We need to assume that the government only works for vested interests and not for the betterment of the common man. Hence, from the point of view of vested interests, cash in the hands of people is bad. This is because since cash is untraceable, it provides some degree of freedom to the people. If all money turns to a digital medium and can be taxed by the government, then this freedom would be eliminated.
Let’s understand how cashless societies will benefit the vested interests. Keep in mind these are not benefits to the common man. Instead, these are the problems that ordinary people will face. The problems of the common man are benefits for these vested interests.
The plan to convert the world into a cashless economy is not as foolproof as it sounds. There are some glaring loopholes in the program.
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