Recently, Liaoning Revitalization Bank and Beijing Zhongguancun Bank have successively announced that they will stop handling cash business such as deposits and withdrawals, change exchange, damaged currency exchange, and ATM deposits and withdrawals, which has aroused widespread concern. Under the general trend of digital transformation of banks, is it reasonable to stop the RMB cash business? In this regard, on February 21, the People's Bank of China and the Banking and Insurance Regulatory Commission jointly held a symposium on RMB cash services for banking financial institutions, which clearly pointed out that "all commercial banks, rural credit cooperatives and other institutions with physical outlets must handle RMB cash access and withdrawal business". Liaoning Revitalization Bank and Beijing Zhongguancun Bank both said on February 22 that they would "continue to carry out cash receipt and payment business."
According to the data released by the central bank, the net cash investment in 2021 is 651 billion yuan, and the cash demand is still strong. Industry insiders interviewed by the Economic Information Daily pointed out that cash business is still of great significance at present, cash business is an important way for banks to reach customers, and it is not appropriate to oppose it and digital and online operations. Banks can explore the construction of a digital and intensive cash service system to further reduce the cost of cash services and improve the quality of services.
Commercial banks with outlets are required to handle RMB cash deposit and withdrawal business
Beijing Zhongguancun Bank previously announced that it will stop the cash receipt and payment business from April 1, 2022, and the channels for the suspension include the counters of business outlets and the self-service channels of ATM machines. Liaoning Zhenxing Bank also announced that it will stop cash business such as over-the-counter cash deposit and withdrawal, change exchange, damaged currency exchange, and self-service equipment deposit and withdrawal from March 1, 2022.
Speaking about the reasons for the suspension of cash receipt and payment business, Zhongguancun Bank said, "As it accelerates the pace of digital transformation and continuously increases the development of online business, in order to provide customers with more convenient and efficient financial services." People in the industry generally believe that the suspension of cash receipt and payment business by the above-mentioned banks is not only related to the consideration of banks to reduce costs, in addition to digital transformation.
The suspension of RMB cash business by some banks has aroused great concern from the regulatory authorities. Fan Yifei, vice president of the Chinese Minmin Bank, pointed out in his speech at a symposium on RMB cash service work for banking financial institutions jointly held by the People's Bank of China and the Banking and Insurance Regulatory Commission that according to preliminary investigations, some bank outlets have also suspended cash access and withdrawal business, involving rural credit cooperatives, foreign-funded banks, and some large state-owned banks.
The above-mentioned meeting clearly pointed out that RMB cash is the national legal tender, cash services are the most basic and fundamental financial services, cash delivery and storage is the most basic business of banking financial institutions, and plays an important role in meeting the needs of the people's production and life, serving the real economy, and maintaining the stability of the monetary and financial system.
Fan Yifei said that commercial banks and rural credit cooperatives with physical outlets must handle RMB cash deposit and withdrawal business. Each institution shall not suspend the RMB cash access and withdrawal business on the grounds of business transformation and upgrading, less cash business, cost control, and reducing business management risks. Branches of the People's Bank of China should strengthen the management of RMB cash access and withdrawal business for banking financial institutions within their jurisdiction, and provide necessary guarantees for them to handle cash access and withdrawal business through various means.
Liaoning Zhenxing Bank said on February 22 that it will resolutely implement the requirements of the central bank, strive to improve the position of financial services, and continue to provide cash services to our customers. Beijing Zhongguancun Bank also said on February 22 that it will continue to carry out cash receipt and payment business according to the requirements of the central bank.
Demand remains strong Certain groups prefer cash
In recent years, although non-cash payment methods such as mobile payment have developed rapidly, the demand for RMB cash is still large. According to Fan Yifei, the net cash investment in 2021 will be 651 billion yuan, and the cash (M0) in circulation in the mainland will reach 9.08 trillion yuan by the end of 2021, an increase of 7.7% year-on-year, continuing to maintain a stable growth momentum. It is the second highest level since the reform and opening up, only lower than in 2020. "The above data reflects the relatively strong demand for cash for the mainland's economic and social development." Fan Yifei said.
The cash deposit and withdrawal business on the bank counter is an important channel to meet the customer's cash access business. According to data from the People's Bank of China, in the first half of 2021, the amount of private cash business of banking financial institutions accounted for more than 90% of the cash business of customers, and the cash access and withdrawal of over-the-counter accounted for more than 70% of the total cash deposit and withdrawal, which is the main channel of cash services.
It is worth noting that the threshold for cash use is low, the anonymity is strong, the payment is fast, and specific groups such as the elderly, small and micro enterprises and individual industrial and commercial households prefer to use cash.
Dong Ximiao, chief researcher of CMF, said that from a practical point of view, online transactions have failed to support cash receipt and payment in the payment method due to limited conditions. However, if more offline institutions refuse to accept RMB, it will affect the normal circulation of RMB and bring inconvenience to people who are accustomed to using cash.
He said that in July 2018, the Chinese Bank issued Announcement No. 10 of 2018 to regulate cash receipt and payment in tourism, catering, retail, transportation and other industries, as well as administrative undertakings, public services and other fields, emphasizing that no unit or individual may refuse to accept cash in the form of standard terms, notices, statements, notices, etc., and requiring that the concept of "cashless" must not be hyped. The People's Bank of China and the Banking and Insurance Regulatory Commission jointly held a symposium on RMB cash service work for banking financial institutions this time, adhering to the problem-oriented approach, clarifying work requirements, and once again emphasizing that it is timely and necessary to do a solid job in RMB cash access and withdrawal business.
According to information released by the central bank on February 22, in the fourth quarter of 2021, the People's Bank of China imposed economic penalties on 32 units and related responsible persons who refused to accept cash in accordance with the law, with penalties ranging from 1,000 yuan to 100,000 yuan. The units punished include public service agencies such as water, electricity, gas, and property payment, as well as parking lots, insurance companies, chain restaurants, and medical institutions.
Dong Ximiao suggested that in the next step, we should speed up the revision of the "Chinese Bank Law," the "Renminbi Management Regulations," the "Interim Regulations on Cash Management," and other revisions, improve the construction of the legal system in the field of payment and settlement, clarify the penalty standards for acts such as refusing to accept cash, and increase the inspection and handling of acts such as refusing to accept bank cards, so as to create a better environment for the public to handle cash business, and strive to eliminate the "digital divide" in financial services.
It is not appropriate to pit cash business against digital operation
Fan Yifei said: Mainland commercial banks are commercial banks of a socialist nature. On the one hand, it is necessary to comply with the general laws of banking operation, with the goal of maximizing benefits, and reduce the burden and efficiency of bank outlets through electronic and digital means, reduce operating costs and improve operational efficiency. On the other hand, it is also necessary to fully reflect its social attributes. As the main force of cash services, banking financial institutions should always adhere to the people-centered development concept, strengthen responsibility, deepen understanding and take the initiative, grasp the relationship between short-term and long-term, micro and macro, coordinate economic interests and social responsibility, comply with the requirements of the new development stage, and continuously improve the ability and level of cash services.
"As a franchise industry, banks should not pursue economic interests one-sidedly, but should coordinate social responsibilities and economic interests, specific to the field of cash business, that is, they should base themselves on the digital economy exhibition environment, continuously improve the quality, ability and level of cash services, and effectively meet customer needs." Che Ning, deputy director of the Research Center for Rule of Law and Sustainable Development of China University of Political Science and Law, said that inclusive finance is the main business direction of commercial banks at present, and it is also the foundation of their future sustainable development, and improving the inclusiveness of financial services, especially cash payment inclusiveness, so that it can be universally enjoyed by the majority of customers is the top priority of inclusive finance, which directly reflects the success of inclusive finance and determines the success or failure of business.
Che Ning also said that as the most convenient and neutral payment tool, cash business is still of great significance at present, cash business is now, and will continue to be an important way for banks to reach customers, which is of great significance for banks to operate traffic, serve customers, and build an ecology.
"Banking financial institutions should raise awareness, do not one-sidedly pursue the speed of digital technology development, do not simply pass on the necessary service costs, balance customer needs, operating costs, risk prevention and other relationships, especially qualified banking financial institutions should appropriately retain manual service windows and appropriately provide cash receipt and payment business." Dong Ximiao said.
Relevant people of Postal Savings Bank also said that banks can combine financial business and practice social responsibility well. The cash business has good customer stickiness, and winning customer trust can reach the needs of a wider range of customers and bring customer expansion opportunities. And by vigorously developing financial technology and building a digital and intensive cash service system, we can further reduce the cost of cash services and improve the quality of services.
Dong Ximiao said that for banks that mainly operate in the Internet model, they can explore the implementation of differentiated policies in cash business. In the next step, if the digital yuan is officially issued, part of the cash receipt and payment business will also be carried out in a digital form, which will better meet the needs of users for cash receipt and payment.
Source: Economic Reference Newspaper