Case Study: Idea To Destiny Via Habit

Nachiket’s Story Nachiket Arya, of Sahas ATMs looked at the calendar and counted the 45th day since the demonetisation. He had been running from pillar to post meeting all kinds of people in a bid to feed his ATMs that had been bone dry since then. Clearly, the currency being printed did not match the amount demonetised.

He met people in RBI, in the Ministry of Finance and anybody who was willing to talk to him. He pointed to them the flaw (and inefficiency) in white label ATMs depending on commercial banks for their currency needs. For them, it was just a business opportunity nothing more. Hence they were free to decline his need for cash. These banks, he said, preferred diverting their currency to their own customers through their branches, than to ATMs which served multi-bank customers. "Which is why ATMs are dry!” he claimed.

So, Nachiket got together with other ATM owners and told friends in the RBI: ‘These are extraordinary circumstances, abnormal even; and extraordinary circumstances demand extraordinary thinking. So, why don’t you give us currency notes through your own chest directly, the way you feed banks?’

Nachiket’s point was, since the limited currency is being rationed out across banks who also have to feed non-banking ATMs, how about that the RBI feeds the non-bank ATMs directly?

The second solution he presented was, that ATM owners be permitted to source cash from businesses that dealt in cash. So, say, from Amazon, or Flipkart, or the local Unilever or the ITC distributor. Nachiket’s reasoning was sound, “In any case, he is going to deposit his cash offtakes into his bank. Why can’t I buy it from him directly into my ATM? So, simply, I will transfer Rs 5 lakh to his account and take the Rs 5 lakh cash from him… His bank still gets funds as he will be banking my cheque and that is what banks are concerned about, no? Currency will thus stay in circulation and I will be able to run my ATMs!”

Nachiket gave the idea of the 7/11s overseas. “If you go to the US or Australia… they have a lot of these ATMs inside shops. The 7/11 owner puts his cash collections for the day into the ATM; the next day he gets it back through the settlement system… exactly how the white label ATM works with banks. Why can’t we see simplicity and ease in this?”

Nothing was working. Nachiket’s intention was to keep the ATMs working and cash flowing so the economy was not arrested and people not struggling. As far his business thinking went, difficult times are not catastrophes if the system is open to innovation.

But sadly all 14,000 private label ATMs stayed shut, including Sahas’s 2,000. If private labels hoped for openness to innovation, the system was hesitant. And rightly so. But in the by lanes and gullies of India, the ‘cottage sector private business’ like gaswalas and courier boys were quite happy helping individuals with ‘change’ for free. His own housekeeper Kunjamma got her salary changed for small notes at Bhagya Gas Sellers. Innovation was rampant among the grassroots of society, but the rest of business hemmed and hawed.

Amal's story amal Devras sat by the tea stall listening to the chorus of voices unloading on him their angst of many days. In some ways, it was not angst as the cities knew; it was an anxiety that had not been understood or labelled yet. But the fact that Amal babu was here, the artisans and village folk at Chamma in Gujarat felt comforted. Amal babu would make things all right.

Amal, helped the local artisans retail their produce as well as with microfinance, working through an NGO. Amal essentially played intermediary in two ways: One, he encouraged the villagers seek finance and two, he explained the microfinance firm’s methods to them making it easier for the company to meet the villagers half way. He lived and worked in the city and came down to Chamma thrice a month. This time, he was gheraoed by nine of the villagers who asked him, “Babu, tame do hajaar maate badlo che?”

“What are you guys doing with Rs 2,000?” asked Amal. “Su karvu, that is what came out of the ATM!” and they all laughed mirthfully. It had become a joke, they were laughing it off.... They had rushed to the ATM when they saw the van come and each one got a pretty pink note. Except, they could not buy anything with it. Now, they believed a man coming from Mumbai was bound to have change.

The artisans of Chamma, their livelihood came from what they made and sold in the big cities. Tie and dye fabric. They did see a dip in sales when they had taken their goods to the city. The festive joy was missing. “Loko udasi jova…” (People looked sad). The few who had bank accounts, were able to accept credit cards. Chamma had been preparing for the festival season that began in October – Navratri, Dussehra, Diwali, Christmas.... Most of these went well but Christmas is when they sold a lot of their tableware, linen, terracotta tree decorations. They had bought their raw material in advance. Printing orders had been placed, designs developed and workers paid for... but now they were sitting with stocks that need to move to the cities for Xmas.... that needed cash, renting stalls in Dilli Haat, for example. Those who sold to, say, Fabindia, had no cause for worry, as one had to have a bank account. But the problem was with the piece workers. How do you pay these guys? Here, the problem was the willingness to part with currency! Darshanbhai, the weave master, would rather save his collection of Rs 100 notes for paying vendors than pay his piece worker. The worker would work anyway… if tea and Surti khaari was thrown in.

Amal saw that every hierarchy had a pecking order of oppression and the cash crisis played out predictably at Chamma. He had decided he would make them open bank accounts before the year ended. But this crisis had just crawled onto them sooner. He would need to give them a reason that connected to their livelihood. Why they should bank; why it was better for them. You cannot tell a guy that it is better for the economy, because nobody cared about that, he thought now.

Amal felt responsible for Chamma. It was a village he had been associated with for over nine years. That they looked up to him, made it worse. The villagers speculated that things will be fine by end December, but Amal had seen the numbers coming out of news, the estimated numbers of currency in circulation, and then, the numbers found in corrupted hoarding of cash. When Bipinbhai did not want to part with his 100s to pay the piece workers, Amal asked him. Bipinbhai had a business man’s intuition, ‘Paristhiti sudhaaravaa nathi, mane lage che…’ (the situation is not going to change, I feel). They had all returned from Dilli Haat’s winter bazaar and, in three days, they had not sold even a rupee's worth. Unprecedented.

TV had entered all these villages. They were seeing city-bred folks stood in queues, they saw bundles and bundles and stashes of currency were being found in the cities.... this was not how things got better! That night, they all watched TV together in Hitenbhai’s home. Silently. The animated discussions on TV left them confused. Amal could see that these folk did not understand the language, the economics of what was going on, but they saw ‘educated’ folk yelling angrily. That left a sharper impression of chaos and disaster. They saw the political offensives and defensives. Bipinbhai said wryly, ‘Isme zaroor bahut bada problem hai, saheb! Jo bhi hoga, isme hamara hi band bajegaa.’

Amal saw it was really about expectations. Already people were expecting things to go bad. Because when he asked to see their business plan for the next year, he could see they had scaled down the scope in a huge way. They had heard the other artisans who had not sold anything at Dilli Haat, say, ‘Demand kam hai....’ – so now they were factoring in all this and saying now there will be less income.

Amal tried to explain to them that their structured approach to business was going to stand them in good stead, that those who banked were winners already and others should follow. But they looked at him with disbelief and doubt. They were not worried that they were village folk. They were worried that on the other side of the divide were city folks whose moves were always hazy, undecipherable. They had seen that in movies. How long before they got hit? City folk who had been hoarding cash. Because of whom demonetisation happened. On whom their business sadly depended. It was just that life began to look bleak.

Amal demands a product that week, Amal met Nachiket enable the banking habit in Chamma. “You want to create habit? Then know that conditioning happens like this. Old impressions stay. Especially the impression we have of villagers and they have of us. Of our systems. They carry a memory of banking being a challenge, there are forms to fill, forms ask strange questions which they don’t understand, then they have to disclose their private life to them... and soon he is told galat fill kiya, dubara karo... they can’t deal with all this. And these experiences spread. Face it, at a public sector bank in the city, you may still get decent service. But a village PSB does not even inspire! No automation, no enabling technology, probably because they do not believe in its worth for the villages. Nobody wants to go there. There is no ownership even today in rural banks.

Even if you have money to save, to deposit, the bank is most daunting. A lot of the saving is done by the women in Chamma. There is one bank for 12-15 villages and that bank is 20 km away. Transport is not easy, social norms do not permit women to sit huddled up with men and goats in a cart... arre, these are important to them, we can rubbish convention all we want, but that is their preferred lifestyle, who are we to demolish that just because it is inconvenient for our economics?!

Nachiket: I agree … So, tell me more about the savings patterns here.

Amal: Women are quietly saving from the men. In fact, in some cases, even if say they are making papads or pickles, women say clearly, ‘Don’t give us cash, buy something for the household’. Some women fear that if they hand over all the cash at home, then they will have nothing to spend on themselves, they don’t want to ask for money either, so they do put aside a little bit: putting it in a bank account does not make sense. Because then when she needs the cash, she can’t go to the bank! And now the ATMs are dry. Whatever little hope I had of their conversion, is dashed!

Nachiket: Let me ask differently. Why is cash preferred?

Amal: Liquidity. Child falls ill, cattle falls ill. Say the milk is infected.... the cow has developed mastitis; it is so very painful for the cow. You need to get the vet immediately. But the vet says, ‘I have no vehicle, you take me or send a cart for me’. The cart man says, ‘Pay me Rs 250....’ And you have no cash. That is the plight today. This is why they prefer to keep cash with them. For you, cow is animal. For them, cow is mother, their livelihood. Then again, it is good to have cash with you rather than having to go somewhere to get it.

Cash is also anonymous. I have cash and nobody needs to know. Say, I have a bank account, then there is a pass book. If there is a pass book, then my balance is written there, my son, husband anybody can find out how much I have. And I don’t want anyone to know. This is my personal savings. And when it is sitting in my rice tin, I know how much is there.”

amal then reflected on the folk’s feelings on the ATM. Many did not use the ATM even if they had a RuPay card. Amal had spent time understanding the behaviours. He explained to Nachiket, “See, the other problem of ATM is, even if my money is seemingly safe there, I don’t know how to read my balance! But now, they are finding out that it is not liquid, because their husbands are unable to draw their own money!

“I know the screen gives you language options, but the receipt is in English! See, language can be a source of comfort; not knowing it is great discomfort.”

Now Amal was agitated when Nachiket suggested that learning 1-9 in English was simple. No, no, that’s so unfair. You cannot run India in English! Look at the ATM buttons! ‘Choose your option’ itself is in English! Ha, ha, ha, sir, you are telling them in English that they can choose their language! This is funny! How will they understand? Someone has to be present and say press this, select that, enter amount… It takes away privacy, which is important to them! It is like we have created a small planet whose strange language begins to rule the entire universe! You give them RuPay cards that says their name in English! Raj Kumar Dogra’s name is in English. Isn’t there a pride in seeing your name on a card? That sense of ownership that comes from seeing your name on the one card that holds your wealth, that is not there. Somebody tells you this is your card. The man does not even know his name is on it!

Sorry? Achha, you are saying all they need is the number of the card, great. Then why don’t you have a card in Gujarati or Tulu for the whole country? Not aspirational, aaah! Ab kiya na MBA wali baat!

“Nachiket bhai, if we want financial growth participation from everyone, then, we must first include everyone. Inclusivity! Then we have to contribute ourselves! Just imagine if your passbook was to be in Telugu. What comfort will you have about the money in your account? You don’t even feel comfortable with the banker who handles your data. These people are kept away from their money!

They cannot read their money! I am saying this piece of paper has your balance written on it, but you have to go home and ask your husband to read it for you? You cannot expect women to evolve if your systems keep them dependant on their men, and that too because we have chosen to only educate the men, not the women!

Nachiket had sensed these obstacles, but now hearing them from Amal made them very real. And now, Amal raised the one issue he had been thinking of all day, “Can’t your ATM also accept cash? My artisans don’t need a bank for wealth management or investment banking, but simply to save money and draw money.”

Amal had been trying hard to encourage the savings habit. “For that, putting money into their account must become easy,” he said. “Today I want them to also learn that if they leave savings in the account, that money grows. That they are not learning. And if they get an instant parchhi(receipt) that says this is how much you put into your account and now this is your balance, the experience will be complete and perfect. Like ours is.”

There had also been some people who had not been able to collect pension owing to shortage of currency. But Amal thought the worst was Sajani in Odisha who was paid in old Rs 500 notes and told to share it with another pensioner.

Amal: Sajani had to run pillar to post to get valid currency for that Rs 500! This is what I meant when I said we feel that their poverty justifies our treating them badly.

Do city fellows understand how it feels to not get one’s pension because banks do not have money? We have a big problem brewing in Chamma, because now they have started borrowing. The money lender is always a money lender; his svabhaav is not going to change. These people are pawning land, cattle... the source of their livelihood. If you are a weaver and you have one loom, and you pawn that loom so that you can feed your family.... what are you doing? Before you know that money lender fellow will squeeze your innards and take it away saying come pay my instalment and take the loom back... Manva is a piece worker; he pawned his loom to get cash. Double whammy, his maalik has no currency, hence he is not giving him jobs. So, Manva is not earning, he is unable to pay instalment, and that loom can get repossessed! He has lost his livelihood!

.... boss, think! While your income has been paused, your expenses don’t pause! Garima, the cow, needs to be fed. The well has to be disinfected. Crops need to be harvested.... who pays for all this? There is no rule of law in villages remember that. There is nowhere they can go and ask for justice.
Nachiket sells a habit

Amal: Ok, enough of my crying. Your scene is pretty bleak, I see. I hear you have lost a lot.

Nachiket: Quite bad, actually. The rural folk have been asking us when are you going to start getting cash in the machines … It hurts more when they are so decent about it.

Amal: Have you probed to see what is their understanding of how the money gets into the ATM? They don’t hold you responsible for money not being in the ATM?
Nachiket: I think, they know that new money needs to be printed, they know that; we have been telling them our story as best as we can, that we don’t print money, we have to get it from various banks; we are just a dispensing machine…. a convenience. Everyone understands that there is a shortage and that the shortage is across the board.

Amal: You don’t think they are losing faith in the ATM system?

Nachiket: No, I don’t think so, Amal: Don’t you think there can be a drop on the ATM habit? It took me a lot to get the chaps in Chamma to open accounts and get the RuPay. Now, they cannot access their own money. They feel terribly confused. I think they feel cheated but they are being polite and not using that word with me. What hurts is that they think of me as ‘them’.

Nachiket: No pain, no gain, is what I feel. Yes everyone is struggling, but there have been great positives. One, a lot of new Jan Dhan Yojna accounts got opened and the inactive ones became active…

For example, an inactive account holder or an unbanked villager, sells a cow or a piece of land. Earlier he kept the money at home. Now, this process of demonetisation has effectively forced him to put it in his bank account, or if he does not have an account, he has had to open one.
Amal: Can you force a habit?

Nachiket: Look at it differently. This entire process has also triggered incremental bank account creations. You could open a zero balance account with just your Aadhar card. That is the whole theme behind JDY. Two, they moved to direct benefit transfer via these accounts. In the absence of banks, there was leakage and the entire subsidy did not reach the beneficiary. Now, it does! Now, the good side of this is that it has made people bring money into the banking system. And thanks to the inconvenience, people are going to be careful and bank all their cash! I feel usage of bank accounts and the usage of ATMs will actually go up once the cash supply is normalised and restored. This is a very common man targeted benefit.

Ask your fellows. They are watching yelling ministers, yes. But they are also seeing how many people are getting caught with tonnes and tonnes of hoarded cash! To eradicate them the good parts of the system too will have to share the pain! It has become very, very clear to everyone, the aye sayers and the nay sayers, that yes, there is a problem with the system, that the disease and the germs have to be cauterised! How much can we sit and pelt stones at the system? It is a rot build-up of 70 years that we have to clean today!

Amal: All that pro-establishment talk is sweet. Ground reality lies where I stand. That is what I deal with. Will my people in Chamma return to the ATM and savings habit? Will you Nachiket be welcome in a new village?

Nachiket: So, here is gum for you to chew, Amal... my banks are charging me interest for dead, useless, invalid money, which they rendered illegal and invalid, not me. Yet because on paper I cannot revoke my overdraft, I am on paper a debtor and they charge me interest! Whereas, these village landlords waived my rent for November for my ATMs, some by 50 per cent, some 100 per cent, saying, “I know your ATM is not running, I won’t take rent.” What do you now say?
Amal said, “Subservience, servitude...”

Read Analysis: Jahnvi Andharia | K. Srinivas | Rangan Varadan