As the first of December approaches, heads of different institutions such as hotels, restaurants and other informal sector are wracking their brains on how to pay their staff. Withdrawal limits of Rs 50,000 per week from current accounts and Rs 24,000 per week from savings accounts have created unprecedented hardships for people who are used to making cash transactions which was a hitherto legitimate activity until cash use was demonized on November 8 last. The Government and Reserve Bank of India, has since then, been at pains to encourage people to use plastic money (debit, credit cards, Paytm and wallet). But this is to assume that behavioural change is an overnight process. Even for the educated, it has taken a while to switch over to the use of debit/credit cards. Many still believe in good old cash. Tribals, in particular feel a sense of security in having ready cash at home. The savings habit is yet to penetrate the last mile. Hence this transition has hit those without bank accounts the hardest. They would first need to open accounts and then apply for a debit card and then learn how to operate it.
Despite the NDA Government’s drive to push citizens to open a Jan Dhan Yojna account for financial inclusion, not all are included as yet. This drive was not preceded by a mass awareness campaign and citizens are yet to fathom the benefits of banking. The argument from millions who earn salaries that hardly see them through the month is, “What’s the point in having an account when we hardly have enough to eat?” Perhaps it is difficult for those who don’t understand poverty to think of the predicament of this category of citizens. Meanwhile even those who have to pay salaries to this constituency are grappling with the cash withdrawal embargo. Even paying by cheque is no solution because of the withdrawal limit. Where do we go from here?