With more banks issuing credit and debit cards and with a larger number of merchant terminals in place, the value of plastic money transactions went up by over 42 per cent to Rs 70,459 crore (Rs 704.59 billion) during 2007-08.
According to the latest data released by the Reserve Bank of India, the growth was significantly higher than the 24.51 per cent rise in the value of plastic money transactions in 2006-07 and was partly attributed to banks encouraging people to use cards for transactions.
In recent months, banks have increasingly put in place schemes, like cash-back offers, to entice people to use more of debit cards.
A banker said use of debit cards was also being pushed as a part of a strategy to encourage account-holders to keep more cash in their accounts.
In an attempt to reduce branch visits and lower transaction costs, banks have been on a spree of issuing debit cards.
The number of such cards went up by 46.7 per cent to 88.31 million at the end of March this year compared with 60.17 million in 2006-07.
The use of credit cards also rose, with some banks offering equated monthly instalment schemes to encourage