Dhasai, Thane: When teenager Geeta Shinde of Dhasai village in Maharashtra swiped a pre-loaded bank card last Tuesday to buy Rs5 worth of wild berries from the village fruit vendor, she took a radical step toward financial literacy—one that involved bankers, villagers and even her school teacher.

As Geeta swiped her Bank of Baroda (BoB) gift debit card, Vijay Singh, the bank’s chief manager for South Mumbai zone, received a transaction alert in Mumbai. To him it was no ordinary alert.

“This is a great step towards financial literacy and inclusion. We want students like Geeta to learn this so that they go home and tell their parents about it. Why use cash when money is available in other forms," says Singh. The fruit vendor proudly displays the Electronic Data Capture (EDC) machine, popularly known as card swipe machine, that BoB gave him free of charge on 1 December.

The village of Dhasai in Thane district is learning a lesson in cash as a result of the demonetisation drive. It’s not as if Dhasai has gone cashless—small cash still changes hands at some shops. Rather villagers are learning that money isn’t all about cash.

ALSO READ | Demonetisation and the rural economy

Towns and cities learnt this long back, without a currency crisis to teach them. But the rural folk of Dhasai, 140 km from Mumbai, are learning about forms of money after demonetisation hit them. It’s becoming a “less cash" village.

BoB has given 50 EDC machines free of charge to shops, including a couple of meat sellers and a tea vendor. Navtej Singh, the bank’s general manager, Mumbai division, says while the immediate aim is to cover all 100 shops in Dhasai, the long-term goals are financial literacy and inclusion. For villagers like Geeta, these EDC machines are proving to be a great substitute for cash. Geeta is keen to tell her father Shivram Shinde, a farmer who does not yet have a debit card, to get one. How does Geeta, a class 10 student, know all this? Ranjit Savarkar, chairman of Maharashtra Military School near Dhasai and the main facilitator of this move, and Geeta’s teachers, gave her the basic know-how. “You need to protect your password. You must not share it with anybody," Savarkar told the students, mostly girls.

The socio-economic profile of Dhasal is similar to many other Maharashtra villages— of its 679 households, 370 belong to scheduled tribes and 150 to scheduled castes. Swapnil Patkar, president of Dhasai Merchants Association, says the two main economic activities are paddy farming and small trade.

Of the two banks in Dhasai— the Thane District Central Co-operative Bank (TDCCB) and Vijaya Bank—the former has a larger customer base—27,000 savings accounts, as it caters to farmers, says Kailash Kor, branch manager.

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“Of these, only 5% would have ATM cards. We have been encouraging farmers to apply for Rupay cards since it is free of charge. But a very small number of farmers actually use their ATM cards," Kor says.

On 10 November, Savarkar, during one of his visits to Dhasai, saw long queues in front of Vijaya Bank and TDCCB. “It was a queue more for withdrawing cash than depositing old notes. I called people I knew at BoB and asked if they could provide machines to retailers. They agreed," Savarkar says.

Navtej Singh says BoB normally charges Rs10,000 as a security deposit and Rs450 as monthly rent for each EDC machine. “We started opening accounts of retailers with us and waived off the charges," he says.

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This move towards cashless transactions not only provided Dhasai villagers an alternative to cash but also saw a spike in business. Patkar, who runs a grocery shop, said his sales dropped 30% immediately after demonetisation—from Rs5,000 per day to Rs3,500. “But after I installed the machine, sales have gone up to Rs6,000-7,000," he says showing EDC transaction slips worth more than Rs15,000 for 5 December.

Salman Sayyad, who runs a meat shop, saw sales rise by 15%. Ramesh Vekhande of Konkan Krushi Seva Kendra on 6 December sold seeds and fertilizers worth Rs5,500 to farmers who used their debit cards.

The Dhasai experiment is catching up in Murbad tehsil, Thane district’s tribal backyard. Before 8 November, only one shop in Murbad village had an EDC machine. Now there are eight, Savarkar says. He is facilitating the expansion in around 60 small villages in the district. Most of these villages are tribal hamlets, some of them with only 20 homes.

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