All payments above Rs 5000 will be via e-payment, says Finance Ministry to departments

The government claimed demonetisation was essential to clampdown on black money and move towards cashless economy.

All payments above Rs 5000 will be via e-payment, says Finance Ministry to departments

In a bid to promote cashless transactions, 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.

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."

According to the reports, 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.


On November 8, government de-legalised Rs 500 and Rs 1000 notes and since then has caused mayhem in general public. The step received much criticism as it disrupted 86 per cent of the cash from the cash-based economy like India. The government claimed the move was essential to clampdown on black money and move towards 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 check-posts.