Currency crunch: micro ATMs boon for small businesses

With lower denominations like Rs 100 becoming scarce with banks and new Rs 2,000 not getting accepted easily, daily purchases of essential commodities have dipped in most markets, shops and street side businesses have been impacted badly. To tide over problems and meet challenges, innovative ideas have started coming into play.

The IDFC Bank launched a cashless transactions facility in the ‘Rythu Bazaar’ in Kukkatpally, Hyderabad one of the most popular retail vegetable market using its interoperable Aadhaar-based microATM.

The facility enables both the vegetable vendors and customers to transact without hassles of dealing with cash or currency of various denominations. The initiative has been implemented with the Telangana State Government.

The mandi micro ATM initiative can be replicated in dozens of Rythu Bazaars in the twin cities of Hyderabad and Secunderabad, which are run by the State Government and have been successful over the past decade of their existence. The prices of vegetables, fruits and select grocery items are fixed on a daily basis by a committee which manages them.

How did the facility operate?

Customers to the Kukkatpally retail market were given tokens against electronic payments made, using the bank’s microATM and its Aadhaar-based biometric authentication. The microATM functions like a ‘bank-in-a-box’ and can be used by customers of all banks. The tokens came in various small denominations, which were used by visitors to make purchases at the mandi.

At the end of the day, the traders and sellers surrendered the tokens collected at the ATM counter. An amount equivalent to the tokens was deposited by the Bank into the vendor’s bank account, using Aadhaar authentication. It brings the benefits of cashless transactions and the ease of biometric authentication, the bank said. As vegetables are a perishable commodity, the move will prevent distress sales by vendors due to non-availability of cash, while providing citizens the convenience of making cashless purchases.

Customers of several banks are using IDFC Bank’s led, interoperable microATMs, to withdraw and deposit cash and conduct banking transactions at close to 1,000 rural and unbanked locations in the country, it said in a release.