South India's first 'cashless' village suffers, says digitization was a 'mistake'
A Telangana village that became an example of Prime Minister Narendra Modi's 'Digital India' campaign post demonetisation has now called digitization a 'mistake'. From being south India's first fully digitized village, Ibrahimpura of Siddipet taluk has gone back to cash transactions.
Siddipet district's Ibrahimpur hit national headlines after becoming the first fully cashless village in December last year. Less than a year later, today, the village has gone back to cash transactions. High service charges levied on bank transactions, heavy rentals on POS swipe machines are to blame.
Ibrahimpur that used 'cards and electronic payments' for things as simple as an auto ride or buying a snack has gone back to phase 1 with banks levying high charges on digital payments and transaction. Shopkeepers, private finance firms owners, self-help groups had opted for POS machines but have today returned them to Andhra Bank's branch thanks to high rentals.
"We have returned our swiping machines to the bank because we had to pay a rental of Rs 1,400 per month. We were expected to pay irrespective of whether we did enough business," said Praveen, a shopkeeper in the village who had very proudly switched to POS swipe machine in December last year. He claims to have lost Rs 10,000 simply as a rental for the machine bringing his profit margins drastically down.
From a village that taught even its senior citizens to use a debit card, Ibrahimpur has gone back to 'cash only'. The villagers now say that it was a mistake to shift to a digital mode of payments. "Ours was declared a model village for digital payments but there is no use in making it compulsory," said Yella Reddy, a resident.
The Telangana government does not want to lose out its cashless village and has urged the banks to waive charges.