A Maharashtra village's cashless dream goes bust

The government started promoting cashless transactions but forgot that it needs infrastructure.

Illustration: Uttam Ghosh/Rediff.com

Dhasai, Maharashtra’s first and only cashless village, no longer lives up to its name.

Residents of Dhasai don’t pull out their cards to swipe it on electronic data capture (EDC) machine anymore. Most transactions are now in cash.

The convenience of using cash is partly the reason why people have given up on electronic payments. The lack of requisite infrastructure is another key factor.

“The government started promoting cashless transactions but forgot that it needs infrastructure. The card swipe machine needs telephone connection that works all the time and regular electricity supply. Mobile and land line network is a huge problem here. Sometimes, we don’t have either for an entire week. Power cuts are regular, too,” says Swapnil Patkar, president of Dhasai Merchants Association, which was instrumental in turning the village cashless.

A few shopkeepers said 5-15 per cent of their business is done via card, and that too only when the transaction amount is above Rs 1,500-2,000.

Bank of Baroda had distributed EDC without any security deposit (which is Rs 10,000) and has also waived the monthly rental of Rs 600 a year.”

Individuals have moved to cash here but 90 per cent of payment from shopkeepers to wholesalers is still done through either cheque or card,” says Ranjit Savarkar, chairman, Swatantryaveer Savarkar Rashtriya Smarak, who arranged the EDCs.

The village has branches of two banks – Vijaya Bank and The Thane District Central Co-Operative Bank.

Patkar says despite repeated requests, none of the banks issue cards to account holders or make efforts to educate them.

The Thane District Central Co-Op Bank has around 27,000 accounts but has issued only 2,200 cards, according to Patkar.

Vijaya Bank has 17,000 accounts and has issued around 4,000 cards.

When Business Standard approached the branches, officials at both the banks spoke on condition of anonymity. They verified the figures and said that it’s the banks' policy to issue cards only if the customer asks for it. The majority of account holders never applied for debit cards.

“Our biggest challenge in issuing a debit card is that most of the account holders are illiterate. They, therefore, cannot operate the ATM machine,” says a Vijaya Bank official.