Wednesday, May 14, 2025
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Cash, Cashless and the banking system

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At no time in the history of India has the banking system been under so much stress. If anyone was unprepared for the revolutionary Demonetisation of Rs 500 and Rs 1000 notes then certainly the banking system was. Most nationalised banks are in the habit of working as Government Departments where staff come in and leave at certain fixed timings. Despite the poor services these banks are able to mop up a lot of deposits because they are lead banks in different states and districts of the North East. The advent of private banks has eased the plight of customers to a certain extent. But the work culture in a region not known to excel in the ‘public’ service still leaves a lot to be desired. The top officials of the bank are often non-plussed about dealing with their non-complying staff. There are several banks where managers come out of their chambers to attend to customers because the staff are either absent or incompetent in public relations and unable to deal with irate customers. It is also evident that banks are unable to handle the large number of transactions that have come in recently through the Jan Dhan Yojna, especially once these start to become actively transacted.

In the North Eastern Region people are as yet to develop the banking habit, leave alone the cashless transaction propounded by city folks. Those who speak of Paytm and other modes of payment forget that a smart phone is a pre-requisite for such transactions. Most people cannot afford a smart phone as yet.  Hence the big jump expected from a hard cash transacting society to a cashless one would take some time. It cannot be imposed from the top. It should be demand driven to succeed. People must see for themselves the seamless manner in which Paytm, Wallet and other payment features work and they need to be convinced that these are safe payment outlets and cannot result in loss of money from their accounts. A mass awareness campaign is much needed. The Government, through the banking system, needs to employ millions of young business correspondents (BCs) who can help transform rural India into a cashless society and make maximum use of the Common Service Centres which are single point destinations for e-governance, e-banking and e-commerce transactions. Only then can India change into a cashless society!

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