Private banks are aiming to set up clearing houses in those areas which lack them. They are waiting for approval from RBI in this regard.

Bankers say that although the country is experiencing growth in cheques, credit cards and account to account transfers, but still around 70% of monetary dealings in the country take place in cash.

They further add that clearing houses speed up the cheque clearance process and thus increase the number of transactions taking place in cash.

"Most people in small towns use cash because they do not have an efficient way of money movement and also they are not educated on the options available," said a senior official at a leading private sector bank.

There are presently 1,200 clearing houses. "We are looking at running clearing houses in the next 2,000 areas, where there is no e-banking or clearing house but the population and trade is significant," said the official. "We are working with RBI and they are evaluating it positively."

The official said that for faster growth of the country it is important that fast movement of money takes place in the system.

"The money moves very fast in the West. While we are good at the options available but from a reach perspective we are way behind," said the official.