BUSINESS

CBDT clarity on cash receipts positive: SFL

‘Provides relief to small borrowers’

The Central Board of Direct Taxes’ clarification about restrictions on cash receipts of Rs. 2 lakh and above is a positive for small borrowers, said T.T. Srinivasaraghavan, Managing Director of Sundaram Finance Ltd. (SFL).

“It made us a little unfriendly to our customers,” Mr. Srinivasaraghavan said. “Those who had been used to paying in cash all these years were suddenly being asked to take the banking channel,’’ he said.

The clarification would provide relief to small borrowers, who did not always transact through the banking system and whose business transactions — both receipts and payments — were in cash, he said. SFL’s cash transactions had dropped from about 18% of collections to as low as 5% following demonetisation, and had rebounded to about 12% once the cash crunch had eased, he said.

“I do not believe that cash is a ‘backward step’. Unfortunately, the discourse, in the last few months, has developed to a point that people think that cash is dirty, which I think is an erroneous impression because cash is a legal tender. All cash is not dirty or dubious,” Mr. Srinivasaraghavan said.

“It [the CBDT’s clarification] will ease collection stresses,’’ he added.

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