The disruptive move of demonetization in a cash dominated financial transaction system in India has heralded the new era of digitization of the banking system. Commercial banks used this challenging action to convert their major transaction process through digital mode and enable the entire financial system to more towards digital transactions. But this disruptive development must be addressed by disruptive innovation and accelerated transformation. A phased and incremental approach is ill-suited to cope up with a change as enormous as this, and requires rapid, coordinated efforts on a war-footing.

Thankfully, the technology to fill the void created by cashless economy not just exists, but thrives in the Indian ecosystem. Indeed, India is now the second largest smartphone market with a solid mobile-device penetration too.

Today, digitization has been infused into the banking systems to such an extent that it demands for a centralized planning. Digital becomes a rightful heavyweight of its own accord, and necessitates driving the digital vision across all levels of the organization. A digital village is one where transactions in the local economy happen in a less cash mode through use of, among others, credit/debit cards and mobile phone applications/e-wallets, and Internet Banking.

There is a concerted effort by commercial banks to develop new capabilities and services in wake of new disruptions in physical financial transactions and all banks have undertaken massive program of digitizing their branches both in urban and rural areas. For example, the demonetization compelled banks to adopt Unified Payment Interface (UPI) platform, and surpassing expectations it has quickly become a widely used payment provision. It is inter operable across banks, and enables payments without sharing the payee and payer bank account details. Also, provisions for digital wallet can be incorporated, enabling faster transactions among those in business.

Finances touch the daily life of people, and therefore, digital capabilities must be accorded the highest priority. Indeed, in wake of demonetization the demand for Point of Sale (PoS) machines has spiraled up. However, there are many small businesses that cannot afford a PoS machine instantly. That’s not necessary either. Thankfully, we live in an era of widespread smartphone use, and this is the opportune time to collectively jump the digital bandwagon. Given that most customers use smartphones, a more integrated, secure mobile-enabled payment solution will boost the digital transformation of the smaller businesses as well.

In line with the National Vision of Digital India and as a part of the corporate social responsibility, leading state owned banks like

Bank of India having largest rural branch network, has decided to transform its village branches through implementation of digitization program. Currently, 89 villages in 49 zones have already been adopted & in the process of digitization to transformed into less-cash banking services. The bank installs 227 POS (point of sale) machines. Bank of India has set each of its 54 zones a target of converting a minimum five villages into ‘digital villages’ by September 2017. Apart from creating digital villages, the public sector bank has floated two schemes - “PATHSHALA and “PRAYOGSHALA” - to create national awareness on digital transactions. Bank of India has a total network of 5,100 branches as on January 31, 2017 of which 2,000 branches are in rural areas.

In line with the National Vision of Digital India and as a part of the corporate social responsibility, leading state owned banks have decided to transform their village branches through implementation of digitization program

For the year 2017-18, 265 villages have been identified for Digital Villages. In Q1, we have converted 5 villages including 2 tribal based villages in Keonjhar district of Odisa,there by taking total digital villages to 94 till now. Our efforts is to complete rest of identified villages to digital villages by end of Sept 2017.

The bank has asked zonal offices to conduct ;PATHSHALA’ (for educating the customers about various cards, its uses and benefits, security of the cards, etc.) and ‘PRAYOGSHALA’ (for imparting practical uses, hand holding and ensure that users are comfortable) at different places such as schools, colleges, seminars, residential colonies, offices and civic bodies to create awareness on the benefits of cashless banking transaction.” In respect of internet connectivity /Network in rural India, the bank officials found that majority of Villagers are using the 3G for Communication medium and most of the bank’s network based on this connectivity medium.

Of our 54 zones pan-India, we have already adopted 89 villages for digital villages in 49 zones within a period of three months (January to March 2017). This year all the zones (54) have given target of converting minimum five villages per zone into digital villages by September 2017. A good merchant, if he wants to encourage digital transactions, will offer all three payment modes - Swipe and Pay (at merchant POS with a card); Click and Pay (customer uses mobile and scans the merchant’s Quick Response code); Touch and Pay (for those who are not savvy with either card or mobile payments, it will be biometric-based Aadhaar payment).

All zonal branches are organising workshops, Digital Literacy Camps for villagers on cashless transactions. Educating the rural peoples about different ways to access and conduct digital transactions. Branches are opening Aadhaar based saving accounts of villagers and students. Distributing Rupay, Visa, Master Cards, Point of Sale machines (m-pos) to shopkeepers. Educating people and local vendors by giving demos on how to do cashless transactions by using various mobile applications. Educating people through distributing literature, leaflets, pamphlets etc. Programs are organised in Gram Panchayat, School and Collages to attract New Generations towards Banks.