First cash­less vil­lage dumps cards

RE­AL­ITY CHECK Res­i­dents say they are forced to re­turn to cash only mode be­cause of high rates charged by the banks

Hindustan Times (Delhi) - - HTNATION - Srini­vasa Rao Ap­pa­rasu srini­vasa.ap­pa­rasu@htlive.com

In a span of 6 months, I had to in­cur a loss of ₹10,000 just for us­ing the ma­chine. What is the use of cash­less trans­ac­tion then?

ARETI PRAVEEN, store owner

IBRAHIMPUR: In nine months, Areti Praveen’s life has come full cir­cle.

The 25-year-old adopted cash­less trans­ac­tions at his pro­vi­sion store last De­cem­ber, roughly a month af­ter the govern­ment’s shock with­drawal of high-cur­rency notes in a bid to fight dodgy cash.

His sleepy vil­lage in Te­lan­gana’s Sid­dipet district – Ibrahimpur – hit the head­lines as south In­dia’s first cash­less vil­lage. Jour­nal­ists poured in to chron­i­cle the 1,200-odd lo­cal res­i­dents who re­fused to ac­cept cash even for auto fares or snacks.

But now, the eu­pho­ria is dead. Vil­lagers have been forced to re­turn to cash be­cause of the high rates charged by banks for trans­ac­tions – and say turn­ing cash­less again is un­likely.

“All of us re­turned our swip­ing ma­chines to the bank as the au­thor­i­ties are col­lect­ing a ren­tal charge of ₹1,400 per month, irre- spec­tive of the vol­ume of busi­ness we did. Even if we did not use the ma­chine, we were forced to pay the amount,” Praveen told Hindustan Times.

“In a span of six months, I had to in­cur a loss of ₹10,000 just for us­ing the ma­chine. What is the use of cash­less trans­ac­tion then?”

When Hindustan Times vis­ited the vil­lage, around 125 kilo­me­tres from Hy­der­abad, none of the seven shops were ac­cept­ing cards and in­sisted on us­ing cash.

“Sorry. Only cash, no card please,” was the re­sponse of Dur­ga­iah, a vendor run­ning Renuka Tif­fin Cen­tre, when this cor­re­spon­dent of­fered to pay through a debit card. “We stopped us­ing cards now. If we want cash, we go to ATMS and draw money,” said 70-year old Bhu­ma­iah, a lo­cal farmer.

Res­i­dents say they went cash­less to join the fight against cor­rup­tion and bat­tle a cash crunch that swept the coun­try fol­low­ing the Novem­ber 8 scrap­ping of ₹1,000 and ₹500 notes. At that time, the Te­lan­gana govern­ment and the Cen­tre were push­ing for cash­less trans­ac­tions and Ibrahimpur was de­clared a model vil­lage to be em­u­lated across In­dia.

Now, vil­lagers ad­mit it was a mis­take. “We have re­alised there is no point in mak­ing cash­less trans­ac­tions com­pul­sory. It is bet­ter to leave it to the con­sumer whether to use the card or cash,” said Kumb­hala Yella Reddy, son of sarpanch K Lak­shmi Devi.

Mulla Shankar, the man­ager of the lo­cal branch of Andhra Bank ad­mit­ted the cash­less trans­ac­tion con­cept was a fail­ure. “Be­fore giv­ing the swip­ing ma­chines, we told them about the ren­tal charge of ₹1,400 per month. But in their en­thu­si­asm, they did not bother. Since they are all petty mer­chants, they found it a big bur­den and hence, they re­turned the ma­chines,” Shankar said.

The vil­lagers say they are proud of the at­ten­tion their move gar­nered – the vil­lage was pub­li­cised by the state and cen­tral gov­ern­ments and ac­knowl­edged by Union IT min­is­ter Ravi Shankar Prasad – but found it dif­fi­cult to main­tain the Elec­tronic Point of Sale (E-POS) ma­chines and later, swip­ing ma­chines with GPRS fa­cil­ity. But the govern­ment isn’t giv­ing up yet and said it has asked the banks to waive the charges.

“They are all petty shop-keep­ers with a small turnover. Ob­vi­ously, they could not bear the heavy ser­vice. We have ap­pealed to the banks to waive th­ese charges. If it hap­pens, we can mo­ti­vate the peo­ple again to go back to cash­less trans­ac­tions,” said state ir­ri­ga­tion min­is­ter and lo­cal MLA T Har­ish Rao.

The vil­lage is just seven kilo­me­tre away from Chin­ta­madaka, the na­tive vil­lage of chief mi­nis- ter K Chan­drasekhar Rao who is also Har­ish Rao’s un­cle.

In the mean­time, the vil­lagers say they have no ATM and are mak­ing do with a fa­cil­ity called “Stree Nidhi Bank,” to draw cash. The fa­cil­ity is run by a wo­man called S De­valatha with the col­lab­o­ra­tion of Andhra Bank, pri­mar­ily to as­sist self-help women’s group that de­posit their sav­ings and with­draw money when­ever needed.

Be­sides, she pays pen­sions to the old and the dis­abled in the vil­lage. “We bring cash in smaller amounts from Andhra Bank reg­u­larly to pay pen­sions in cash. We ver­ify their cre­den­tials through their Aad­haar cards and also by tak­ing their thumb im­pres­sions us­ing a bio­met­ric ma­chine, which is linked to my com­puter,” De­valatha told Hindustan Times.

She also has a swip­ing ma­chine, which is linked to the bank. “We swipe the card for the re­quired amount and pay the cash to the peo­ple, ir­re­spec­tive of whether they be­long to our vil­lage or not. I get a com­mis­sion of around ₹3,000 to ₹4,000 per month,” she said.

HT PHOTO

S De­valatha, who runs Stree Nidhi Bank in the vil­lage for self­help groups and pen­sion­ers, is now a vir­tual ATM for the peo­ple.

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