MuthootBlog

The Cashless Villages of India

  • April 10, 2017
  • rootroot

While we sit in our traffic jams day after day and debate the pros and cons of going cashless, there are villages in India that have already gone digital. It was Akodara, a small village in Gujarat that went cashless first, back in 2015. Following the demonetization drive, a number of other villages have also joined the ranks. While Akodara follows a mobile banking route for their daily transactions, Dhasai, the first cashless village of Maharashtra, is more about card payments through an EDC machine.

How did cashless villages come about?

The beginning to the journey towards becoming a cashless village has not been the smoothest for a number of villages that chose this path. However, with a little work, the government was able to ensure that a maximum number of adults in the villages had bank accounts as well as debit cards. A cashless village is a village that has given up the use of cash in most scenarios. Though a certain percentage of cash transactions will of course always be there, a majority of the transactions in such villages are held through digital means.

What’s Different?

  • Almost all the adults of these villages have had bank accounts opened

  • All the residents use mobile SMS payments and plastic money

  • Everyone has Aadhaar cards that have been linked to their bank accounts

The cashless villages

Right now there are six villages in India that have already gone digital:

  • Akodara, Gujarat

  • Basti of Maner, Patna

  • Bind Toli of Kurji, Patna

  • Dhasai, Maharashtra

  • Ibrahimpur, Telangana

  • Patsa Village of Bihta, Patna

As you can see, Patna has been able to accomplish a lot in a short time, with three villages already on the list.

Akodara – The village where it all started

Back in 2015, this village which houses a population of 1200 was adopted by ICICI bank to try and take it towards digitization. It of course took time and efforts, but today, almost every adult in Akodara has a bank account, because of which it has been possible to create a financial inclusion and provide access to modern banking services. This was the main step that allowed the village, including the local markets, to go cash-free. Not only did this make the village less susceptible to corruption, but the linking of Aadhaar cards to the saving bank accounts has also led to the government benefits being transferred directly to the saving accounts held by the people in the village.

In fact, the benefits of such a society were clearly seen in this village towards the end of 2016, when the entire country faced a cash crunch following the demonetization move and almost everyone was standing in some or the other queue outside an ATM. The village of Akodara was more or less unaffected, as everyone had already given up the use of cash for major purchases.

In the current tune of change, it is only a matter of time before more villages join the transition towards becoming ‘cashless’.

This helps show us that irrespective of the challenges that we might have to face; change is not that far out of reach. These villages are setting astounding examples for urban settlements to follow, a feat they can be proud of!

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