Isn't Plan To Ban Small Value Electronic Transactions Exposing Elitist Tendency Of Banks?

Several Founders, Co-Founders, CXO Bankers, CXO Fintech professional & people who participated in the ePanel discussions:

Mr. Jayaram M, Consultant (Partner), Basil Capital
Mr. Probir Roy, Co-founder, Paymate
Mr. Ravi Shankar, Co-Founder, and CEO, Active Intelligence Pte Ltd
Mr. Sanjay Saxena, CFO, Paytm Payments Bank
Mr. Amit Sukhija, Senior VP, AU Small Finance Bank
Mr. Ajayakumar K R, CISO, Vijaya Bank
Mr. Sheoji Meena, General Manager, Bank of India
Ms. Rukmani K Narayan, VP Internal Audit, Equitas Small Finance Bank
Mr. Narayanan S, General Manager Business Solutions, Associate Director, Principal Consultant, Cognizant
Mr. P B Prakash, Head-Financial Institutions Group, IndusInd Bank
Mr. Rana Sinha Ray, Former Head Technology, TimesofMoney
Mr. Abhishek Arun, Chief Operating Officer, Paytm Payments Bank
Mr. Neeraj Chandra, Head of Operations and Technology, India, Abu Dhabi Commercial Bank
Mr. Rajkumar S, Manager, Paytm
Mr. Hemal Shah, former Technical Product Manager, Mastercard
Mr. Ishan Vaish, India Partnership Manager- Worldwide Developer Relations, Apple
Mr. Kamonasish Aayush Mazumdar, Founder & CEO at Foodieverse
Mr. Arun Tanksali, Co-founder & CTO, Nearex
Mr. Muthu Krishnan, Associate VP – Merchant Acquisition, India Transact Services Ltd
Mr. Prasad Likhite, Director Sales, ACI Worldwide
Mr. Salil Chugh, Head Analytics and Data Partnerships, Experian Asia Pacific
Mr. Anupam Varghese, Chief Tinkerer, Tinkerbee Innovations
Mr. Amit Lakhotia, Angel Investor, BharatPe
Mr. Taron Mohan, CEO & Promoter, NextGen Telesolutions Pvt Ltd
Mr. Shashank Chowdhury, Former Executive VP- Inclusion Initiatives, Vakrangee Software Ltd
Vikas R Panditrao, Co-Founder, Forum of Industry and Academic Knowledge Sharing (FIAKS)
Many other CEO/CXO Bankers & Fintech professionals on FIAKS Forum requested to remain anonymous

So this time FIAKS community discussions rolled around this concern, “Will ban of small-ticket transaction less than Rs. 50/- prevent tech outages of banks?”

Further following questions were raised;

Question 1: Isn’t such a request from banks is like indirectly telling regulators (RBI) to withdraw or stop the issuance of currencies. (50 paisa coin, Rs. 1/-, Rs. 10/-, Rs. 20/-, Rs. 50/-)

This approach of excluding the small is not new. This has been most prevalent in lending. Small borrowers are avoided due to the hard work involved in every stage of their life cycle. Small currency notes brought by a depositor are almost flatly refused to be accepted in many branches. So, this is in line with the elitist tendency of banks. Perhaps, the glee of the elitists on the introduction of Rs. 2000 notes are not yet forgotten.
Small ticket transactions digitally were declined by card companies also. Back earlier about 5 years ago there used to be thresholds to use CC or DC for mobile recharge for small-ticket transactions. The key reason given by acquirers then was that fraud costs on digital mobile recharge at the ticket size did not make it worth it. Worthwhile to evaluate an NPCI view to get both sides of the story. Then possibly take a balanced view.
Member mentions, “this move reminds me of the time when BSNL landline used to have advertisements saying: “do not have long phone calls, keep your calls crisp and to the point, some other important call might be blocked because you were hogging the line!” The only cure to this was the arrival of competition in the form of mobile telephony and people were eventually incentivized and not penalized for using communications services more. Perhaps it’s time for the competition here too?
How can banks ignore small savings? Does RBI even have the locus to pass such a regulation? What are the savings/earnings on UPI now? How does earning matter? RBI doesn’t have the right to say you can’t transact below Rs 50. That will open a Pandoras Box. Then they can say tomorrow banks must not accept transactions where the unit digit is not zero, or transactions that have paise value in them. I am questioning the right RBI has to pass such a regulation. Can RBI say no good or service up to Rs. 50 must be sold.

Question 2: Isn’t this like telling bottom of pyramid customers that the UPI product is not meant for you?