The RBI urges public to adopt ‘digital’ as ATMs run dry

India is one of the countries with diverse demography which holds the highest number of poor and marginalised people around the globe, in absolute numbers

Arun Payyakkaparambil


The statements from the ruling class and the RBI these days, especially after the demonetization of 500 & 1000 rupee notes, are elitist in nature. Their urge to ‘adopt digital’ sounds similar to the French queen Marie-Antoinette’s most famous quote during the French Revolution, “Let Them Eat Cake”

India is one of the countries with diverse demography which holds the highest number of poor and marginalised people around the globe, in absolute numbers. As per the 2011 census data, only 58.70% households are availing banking services in the country. The rural and semi-urban split of the figure is 37 and 26 respectively. That is, a significant portion of the rural and semi-urban population are out of the formal fold of the banking system.

The Position of households availing banking services

The Position of households availing banking services

According to a research report, only less than 10% of the people in the country have ever used any kind of non-cash payment instrument. If we consider that 10% as the super rich, rich and urban middle class, the lion-share of the population is with cash payments. (Institute for Business in the Global Context, 2012).


The figures are changed a little after the 2011 census,especially after the most celebrated . It has improved the banking penetration in India, that’s true. But as of the statistics published on PMJDY website a few days before the demonetisation announcement, 23.37% of the scheme are zero balance accounts. The number of one/two digit balance accounts are even higher than that.

The major share of the people in the unorganised sector and rural India are still not included in any form of formal banking, and do not have access to ‘digital money’. The fisherman/woman, laundryman/woman, vegetable and fruit vendors, newspaper vendors, housemaids,domestic helpers and many others are coming under this category. They get their salaries/payments in hand and spend whenever he/she is in need. How can they ‘go digital’ in terms of payments? In such a scenario, anyone below the urban middle class is excluded from RBI’s recommendation to ‘adopt digital’.

The demonetisation is not only a problem of the poorest, but everyone in the society except the rich and super rich in the country who can afford to opt out the usage of currencies and cash payments with their credit/debit cards is facing problems with this demonetisation. Among the middle-class people with access to digital payment methods, it is not easy to pay at a fish market,fruit vendors or to a Rickshaw Wala, but they can manage well in comparison with the poor.

[If the argument is, the common man use 10,20,50 and 100 rupee notes and this demonetization affected only the black-money holders and rich who hold 500 and 1000 rupee notes, what is the need of a 2000 rupee currency in a country of poor?]

The poor are at the receiving end of a series of ill planned and ill executed reforms in the economic sector, like overnight demonetisation which denied access to the normal cash transaction of the poor, that resulted in serious problems in the life of common man. They are facing problems in every realm of their life, in shops, petrol bunks, hospitals etc. It may take few months to reach the normal money flow in the market and to solve their problems cash payments, till then ask the poor to “Eat Cake & Adopt Digital”.