Chennai: Participants in the Centre’s national rural employment guarantee scheme (NREGS) in certain parts of rural Tamil Nadu will soon receive their money from automatic cash dispensing machines, speeding up the process of cash disbursal and reducing the chances of leakage.
As many as 10 ‘grammtellers’, or low-cost automatic teller machines (ATMs), will be rolled out in the test phase in the state, according to L. Kannan, promoter and managing director of Vortex Engineering Pvt. Ltd, a company that designs and builds special machinery. The 10 ATMs would be set up in as many villages in Cuddalore district in southern Tamil Nadu.
Two of India’s largest banks, ICICI Bank and State Bank of India, are partners in the venture. The machine costs about Rs75,000 compared with the Rs 8 lakh for a conventional ATM.
The government uses SBI for the disbursement of funds.
“The product has been tested in the cities... we just have to perfect the switch, which is in an advanced stage of development,” said Kannan.
A “switch’ is a network device functioning like a router, and determining the location data should be sent to and received from.
Under NREGS, employment is provided to one person from every poor rural household for at least 100 days in a year, and payments are made weekly.
The rural ATM project was originally conceived by TeNet, a project affiliated with the Indian Institute of Technology (Madras) that aims to connect rural India to urban India through telecommunications and networks.
TeNet came up with the idea of a rural ATM in 2001 to make it “financially viable for banks to transact with villages,” said Bhaskar Ramamurthi, faculty member of IIT-M and a TeNet founding member.
Standard ATMs cost Rs7-8 lakh and are expensive to maintain—they need an air-conditioned environment—and would not justify the return on investment for the value of money transacted by villages, he said. As a result, TeNet set about to design an ATM that would be less expensive to manufacture, and would not require an air-conditioned environment.
The rural ATMs will ask for a pin code as well as a scan of the thumbprint. Current central bank regulations do not recognize biometric identification as a method by which money can be withdrawn, so the ‘grammteller’ has both the fingerprint scanner as well as the pin code.
Also, since TeNet had facilitated the setting up of rural Internet kiosks across Tamil Nadu and Gujarat, it decided to set up the ATMs there to save on investment in space.
The rural ATM also allows for soiled notes to be used, unlike a city-based machine, giving banks another incentive to take up the concept, since they may not want to issue fresh notes for deposits in a machine that would contain about “one-fifth the amount of money that an ATM in Chennai, for example, would have,” he added.
A typical ATM in the heart of Chennai would be filled with about Rs15 lakh every day.
Indians in rural areas are suspicious that fresh notes might be counterfeit, since they mostly deal with soiled notes, said Kannan of Vortex.