Mumbai: ICICI Bank Ltd on Monday announced a program to transform 100 villages into ‘ICICI digital villages’ in 100 days on the lines of Akodara, India’s first digital village in Gujarat.
Banks and payment firms have made several steps to help reduce cash transactions and increase digital payments after Rs500 and Rs1,000 notes which were 86.4% of value of currency in circulation were withdrawn on 8 November.
“These villages will be spread across the country. They might be more focused on those states which have more agriculture in their economic composition. We have already started some of this work in some of these villages. Akodara was the first such activity, but after that, we have started work in Bedag in Sangli in Maharashtra, Bhikamkor in Rajasthan and Vengur in Tamil Nadu. We have picked up villages across the country and we are launching it,” Chanda Kochhar, managing director and chief executive officer, ICICI Bank said in a statement.
Kochhar declined to comment on the cost of the entire programme and said the bank plans to focus on these 100 villages for now and will think about scaling up later.
The programme will focus on digitizing the source of income and imparting vocational training to underprivileged villagers so that they become self-employed and provide credit linkages to enhance livelihood by way of formation of self-help groups (SHGs) and extend credit facilities to the trained villagers in the form of kisan credit cards, two-wheeler loans and farm equipment loans among others.
“The bank will create a cashless digital economic system for predominated commercial activities in the villages by replicating similar model across the villages,” Kochhar said.
In Akodara, for example, the bank has been able to create end-to-end measuring, tracking and payment solutions for the milk cooperative society and its members for sale of milk. As a result, every tenth day, money is credited directly in the farmers account.
To facilitate agricultural activity, the bank plans to set up point of sale (PoS) machines at seed and fertiliser outlets for cashless transactions using RuPay cards.
“To establish and evangelize such cashless initiatives, technology will be the enabler, but given the current level of penetration and maturity, the financial institutions are more likely to lead such initiatives. The system may need to factor certain traditional practices of revolving credit, deferred payments, set offs etc., and even if it is able to cover 75-80% monetary value of the transactions, it would be immense,” said P.N. Sudarshan, partner at Deloitte Touche Tohmastu India LLP.