Chennai, (IANS) : Bridging the Rs 3 lakh crore gap of the actual currency in circulation and the required amount through digital banking requires a massive investment in infrastructure, says a report by the State Bank of India (SBI).

According to the report prepared by SBI’s Group Chief Economic Advisor Soumya Kanti Ghosh, the conservative estimate of the gap between the actual currency in circulation and the required currency in circulation is around Rs 3 lakh crore.

“The current size of digital banking (including credit card, debit card transaction through PoS [point of sales] terminals, transaction through Prepaid Payment Instruments like m-Wallet etc and mobile banking) is around Rs 1.2 lakh crore,” he said in the report.

“This size has to increase from the current level to at least Rs 3 lakh crore (which is a conservative estimate of the gap between the actual currency in circulation and required currency in circulation),” he added.

According to Ghosh, for the size of digital banking to increase to Rs 3 lakh crore, there is a need for around 20 million extra PoS terminals.

“Further, we have to ensure that per mobile banking transaction increases currently (September 2016) from Rs 10,000 to Rs 25,000 monthly. Mobile wallet transactions need to increase from current level of Rs 32 billion to around Rs 100 billion going forward,” the report said.

“This means that value per transaction needs to increase significantly from current level of mere Rs 425 to around Rs 1,000,” the report added.

According to the report, the government may also look at specifying a certain limit for digital transactions for individuals that could be available for tax deduction.

These may be akin to tax rebates given under section 80C of the Income Tax Act.

The other measures suggested are banning all cash transactions for government services, mandatory installation of POS machines at merchant outlets and making PAN details mandatory for any cash transaction above a specified limit.