Markets Exchanges,retail,

Markets Exchanges,retail,

Norway’s largest bank, DNB, has said that cash has fallen out of favour with everyday Norwegians and is instead primarily used on the black market and in laundering schemes.

“Today, there is approximately 50 billion kroner in circulation and [central bank] Norges Bank can only account for 40 percent of its use. That means that 60 percent of money usage is outside of any control. We believe that is due to under-the-table money and laundering,” bank executive Trond Bentestuen told Verdens Gang (VG).

"There are so many dangers and disadvantages associated with cash, we have concluded that it should be phased out," he added.

Bentestuen said that only around six percent of the Norwegian population uses cash daily, with the numbers higher amongst the elderly.

The Ministry of Finance is opposed to DNB’s proposal and the bank official acknowledged that going completely cashless “will likely take some time” but suggested that the process should be started now, for example by discontinuing 1,000 kroner notes..

Bentestuen said that the entire banking system is now outdated.

“Eighty-five percent of our customers say that they never or only very rarely go to the bank. Therefore we think it is a mistake to maintain a very old structure with local branch offices. It is better to follow the customers and improve the offers where the customers are: digital,” he told VG.

Finance Ministry spokesman Tore Vamraak said that although the government sees where DNB is coming from, “we have no plans to change the law in this area now”.

“There are many, including the elderly, who still want to use cash and that must be allowed. Moreover, it isn’t unproblematic for privacy to make every transaction traceable,” Vamraak told VG.

DNB and Norway’s second-largest bank, Nordea, have already largely stopped carrying cash in their branch offices and the Norwegian Hospitality Association has lobbied to abolish consumers' right to pay in cash at all shops and restaurants since as far back as 2013.

VG readers seemed split on the proposal to completely remove cash from Norway. In nearly 200 comments posted on the article, many said that they would welcome the move since they never use cash while others alleged that scrapping cash would hurt tourists, create privacy issues, deprive children of learning opportunities and not least of all clear the way for banks to profit handsomely off of transaction fees.

Re-disseminated by The Asian Banker