Banning of cheque books will cause inconvenience to the traders and businesses as according the reports 95 percent of their transactions take place through cash or cheques.

After one year of controversial demonetisation decision which sought to digitise economy, the Narendra Modi government is likely to ban cheque books usage, media reports say.

The move comes in the wake of failure in achieving the complete digitisation of economy. Though digital transactions spiked soon after the ban of high value Rs 500 and Rs 1,000 notes, cash has made a come back with liquidity improving in the system.

A senior functionary of Confederation of All India Traders (CAIT) had recently said the Centre may withdraw the bank cheque book facility in the "near future" to encourage digital transactions.

"In all probability, the Centre may withdraw the cheque book facility in the near future to encourage digital transactions," CAIT Secretary General Praveen Khandelwal was quoted as saying in a PTI report.

Khandelwal also wanted the government to incentivise digital transactions using debit and credit cards.

"The government spends Rs 25,000 crore on printing of currency notes and another Rs 6,000 crore on their security and logistics.

"Moreover, banks charge 1 percent on payments through debit card and 2 percent through credit cards. The government needs to incentivise this process by providing subsidy directly to the banks so these charges can be waived," Khandelwal was quoted as saying in the report.

Khandelwal had said only 5 percent of the total 80-crore ATM-cum-debit cards are used for cashless transactions, while 95 percent of them are used for cash withdrawals.

Banning of cheque books will cause inconvenience to the traders and businesses as according the reports 95 percent of their transactions take place through cash or cheques.

CAIT president B C Bhartia had said a sizeable part of the Indian population consists of youths.

"Youths prefer digital transactions. Even temples have put up machines for digital transactions. Now, the government needs to make digital transactions more attractive," he added.