Cashless
the country needs to move away from cash-based transaction towards a cashless
(electronic) payment system to help reduce currency management cost, track
transactions, check tax avoidance, fraud etc., enhance financial inclusion and
integrate the parallel economy with the mainstream. India has a majority
percentage of the population residing in rural areas and by and large, the
literacy percentage is low in spite of the adult education program launched by
the government. Higher rural population, late adoption of technology by the
country, lack of awareness among potential users, optimum utilization of
technology in hand, optimum marketing of e-delivery channels and security
concern in use of e-delivery banking channels are some major issues causing
hindrance in converting cash-rich Indian society to cash-late one. The present
article deals with these issues by way of presenting some key challenges
noticed during a survey in rural areas of Uttar Pradesh state of India. We have
suggested some ways to promote a cash-late system among rural Indian society.
Introduction
India has a majority
percentage of population living in rural areas and still in large areas, the
literacy percentage is low in spite of the adult education program launched by
the government1. In the country’s current context, the central government is
talking about Cashless India, Digital India. As India is cash heavy society, we
cannot make a cashless society overnight; it is impossible to remove all the
physical money and to use digital money instead of physical currency. Of
course, we can reduce the usage of cash and here the word “Cash-late” comes. We
want cash-late society because the country is incurring $ 3.5 billion in
currency operation (currency management) a year. Each day 35.6 billion of the
new currency was printed, and 32.7 billion In other words, India’s love for
cash costs $3.5 billion a year for its currency operation (this includes
printing) of new currency, maintained of currency chest, ATM cost, & etc.)
from printing to disposal of the soiled bank note and investment in counterfeit
note detector machine. This is a substantial additional cost on the country.
For minimizing it, we can reduce the usage of cash & lessen the dependency
on cash and start using digital mode of payments instead of cash. With
increasing digital technologies (i.e. micro ATM, ATM, White ATM, POS, mobile
phone) in rural areas, there is a need for more effective financial inclusion
approach which delivers sustainable services to the last mile customers in
rural areas, especially women and lower socio-economic strata of the society.
Also, it is increasingly clear that more focused attention is required in a
decentralized manner to improve demand side capacities through sustained and
customized financial literacy initiatives with localized content. To assess the
situation in rural India, a research study was undertaken in the months of
April-June 2018 to assess the situation at village level (in U.P. state) about
digital literacy, usage of digital channels, key challenges in converting cash
rich to the cash-late system by the rural community
Methodology
A mixed design approach
method comprising of quantitative, qualitative and observation methods were
used concerning the defined objectives. Focused Group Discussion (FGD) and
In-Depth Interview (IDI) techniques were used as a qualitative research tool,
and the structured questionnaire at the individual household level was used as
a quantitative tool. The target group, research tool and methodology is
depicted in Table 1 below. Table 1: Meta-analysis table Target group
Description Research Instruments Research Design covered Households Gender mix
(male Questionnaire Mixed (quantitative & female) & qualitative)
Micro-ATM The BC agents appointed FGD Qualitative operator by banks to promote
and manage financial services using micro-ATM Shopkeepers and All Shopkeeper
where POS In-depth-Interview Qualitative other local business devices are
deployed & enterprises not deployed Ten villages in Hasanganj block of
Unnao district, Uttar Pradesh were selected for the study. An overall number of
villages in Hasanganj block is 156 out of which customer service point (CSP) is
available in 22 villages, and one of the criteria of selecting village was the
availability of CSP (bank MITRE/bank Saki) which is deployed by the Graeme Bank
of Aryavart. The first author surveyed total ten villages during his summer
internship project (April 2018 to June 2018) where CSPs were available. The
villages were selected by 4 clusters, and within a cluster, the village was selected
randomly. Total no of sampling unit was 113, out of which 13 people/respondents
don’t respond to the questionnaire. Therefore effective no of sample size was
100 individuals comprising age group from 18 to 80. The selection of
individuals was made via snowball convenient sampling which was started with
the help of CSP available in that particular village. A total of 100 individual
responses were collected through questionnaire along with one focus group
discussion with household and one focus group discussion done with BC agents
working there. Results and Discussion Gender Mix - (Male-Female) Considering
methodology and sample distribution as defined, the overall gender mix of
actual respondents viz. male and female were found in the ratio of 60:40
Education People were
found from various educational backgrounds, and 34% of respondents were having
an education above secondary level while 13% people were illiterate
