Cashless India is a non-starter, my friends

The poor can't withdraw their money from their bank account and other Indians live in constant fear of their money getting stolen by unscrupulous hackers, says Syed Firdaus Ashraf.
Illustration: Dominic Xavier/Rediff.com

Two weeks ago, I got a call from my credit card company.

The telemarketeer told me that the credit card company was increasing my credit limit from Rs 50,000 to Rs 300,000.

"Thank you," I said, "but I don't need it."

The telesalesman then put fear into my head.

"Sir, there is a cash crunch in the country. God forbid, if you have to go to hospital, you will not get money on time. Moreover, many hospitals do not accept cashless insurance cards. So it is my request that you increase your credit limit."

I was not persuaded by the argument and I said no again to raising my credit limit.

"What if you are going out of Mumbai with your family and meet with an accident?" the persistent telecaller argued. "Where will you get cash from? Imagine your situation then at some hospital in an unknown city with no cash in hand."

The fear factor worked this time, and I asked him to go ahead and increase my credit limit.

Unlike some of my colleagues, I only have a single credit card and have never used any other digital platform to make a payment.

Why?

Because I don't trust the digital mode of payments. I never feel my money is safe on any digital platform.

Even the strident advocates for a cashless India will concede that digital modes of payment are not 100% secure.

So what do I do?

Tech savvy friends said if I wanted to go digital I needed to open multiple bank accounts for safety.

"Never ever keep all your money in one bank account," my friends advised me.

I went to the nearest bank to open an account.

I took all the relevant documents and gave the bank a cheque to open an account.

15 days later, the bank account was not active. I asked the bank why it was taking so long to activate an account.

The delay, a bank staffer told me, was due to demonetisation. It was impossible to open an account at such a short notice in these times.

If this is the case in Mumbai, then imagine the plight of a villager in Uttar Pradesh.

Poor people, the bank staffer said, have Jan Dhan Yojana accounts which can be opened immediately.

"Poor people are preferred customers under the Jan Dhan scheme," she said.

At least poor people benefit in a cashless India, I thought, as I walked away without opening a bank account.

***

A couple of days ago, I encountered a taxi driver who was cursing demonetisation.

He told me how he had planned to buy a second hand car and make money by driving for Uber.

He had saved Rs 150,000 and was all set to make the payment to a car dealer on November 9. But the night before, Prime Minister Modi scrapped Rs 500 and 1,000 notes.

"I felt betrayed," the taxi driver said. "How could the prime minister do this to a poor man like me? I was on the path to progress and he just stalled my progress."

What did he do with the money?

"I put it in the bank on November 11, but it is of no use," he said.

Post demonetisation, the banks have imposed a monthly withdrawal limit of Rs 10,000 for Jan Dhan Yojana accounts. At that rate, he would not able to pay the dealer for the next year.

Why didn't he pay the dealer by cheque, I asked.

His answer startled me.

"I have no cheque book. People who have Jan Dhan accounts don't get cheque books," he said.

I checked the Jan Dhan Yojana Web site and it confirmed what the cabbie had told me.

The Web site (external link) says if a Jan Dhan Yojana account holder wants a cheque book, then s/he needs to fulfil certain criteria.

And guess how many Jan Dhan accounts there are in India?

259.8 million.

But the government does not want to provide cheque books to all these poor people who want to go cashless.

Now since they don't have a cheque book they have to depend on cash.

As I was writing this column I got a frantic call from a colleague whose credit card had been hacked.

A fraudster had shopped for Rs 3 lakh plus on my colleague's credit card. My colleague asked if he needed to register a complaint with the cyber police or at the nearest police station.

Cashless India is a non starter, my friends.

The poor can't withdraw their money from their bank accounts and otjer Indians live in constant fear of their money being stolen by unscrupulous hackers.