He has also suggested to investigate it Competition Commission of India (CCI) in the practices of chip suppliers.
Banks collectively through the Indian Banks’ Association (IBA) reached out to the government on the issue last month, people familiar with the development said.
The banking industry is falling down chip supply Temporary reduction in view of Kovid-19 shutdown ChinaSlow card issue.
Banks are finding it difficult to provide cards to new Pradhan Mantri Jan Dhan Yojana (PMJDY) account holders, delaying insurance coverage of beneficiaries, a bank executive said.
The lack of supply has pushed up the prices of chips globally, leading to price increases by local vendors.
A government official said the card shortage is expected to last for some time due to the ongoing global uncertainties.
“We are aware of the challenges faced by the industry and will be looking at some long-term solutions including promoting local manufacturing,” he added.
Bank officials said that the local vendors had raised prices despite existing supply contracts and were colluding with each other to push up the prices.
Justifying the demand for CCI review into possible cartelisation, the official said, “Local vendors are insisting on price hike despite existing supply contracts.”
About 319.7 million RuPay cards have been issued this year till August 24. Around 35 lakh cards were issued in the first four months of the current financial year. Beneficiaries under PMJDY accounts have increased to 463 million from 430.4 million last year.