Nobel laureate says demonetisation kills black money and has increased liquidity of the banks

Cashless economy is a boon, Muhammad Yunus, founder of Grameen Bank and Nobel Peace Prize winner, has said.

Talking to The Hindu on the sidelines of an international symposium organised by Andhra University here on Thursday, he said demonetisation had to come some day. “What is needed is to add incentives to the cashless model to make it successful. Most important, demonetisation has brought the rural and unorganised sectors into the banking fold.”

He said, “Demonetisation kills black money and has increased liquidity.”

Micro-credit was a social business. It was all about trust between the banker and the customer, he noted.

Professor Yunus was awarded the Nobel Prize for successfully taking micro-credit and micro-finance to the doorsteps of poor rural women in Bangladesh.

“The concept of micro-credit is built on mutual trust between the banker and the beneficiary. We do not have the thought of collecting any documents or things as collateral security or guarantors. And despite that, we have a repayment rate of 99.5 per cent,” he said.

The Grameen Bank that was founded in 1976 to take banking to the doorsteps of rural women, had a customer base of over 90 lakh today, he said.