CHENNAI: Tamil Nadu Cooperation department is planning to modify fair price shops to also function as micro-ATMs that provide cash disbursement services. The proposal aims to offer last-mile banking access to underserved communities that face challenges in accessing ATMs and bank branches.
To achieve this, the state plans to introduce Aadhaar-based digital payment services at ration shops in rural areas, hill stations, and densely populated regions lacking banking facilities.
A digital device with biometric authentication, capable of providing core banking services, would be installed at ration shops and a banking correspondent would be deployed.
Eight years ago, the centre mooted the idea, but it did not materialise due to challenges in linking electronic Point-of-Sale machines to core banking solutions platforms.
Registrar of Cooperative Societies N Subbaiyan told TNIE that works are under way to identify ration shops that could be modified. He said, “Further modalities of transformation would be explored. A G.O. on the same is expected soon.”
Subbaiyan said many Primary Agricultural Cooperative Credit Societies (PACCS) were modified to offer similar services. “Out of the 4,500 PACCS units, nearly 3,500 function as micro-ATMs,” he added.
Micro-ATMs to enable transactions of Rs 1k to Rs 2k
Using Aadhaar-based authentication, consumers could make transactions between Rs 1,000 and Rs 2,000 at these micro-ATMs. Social welfare pensions -- currently distributed through banking correspondents -- could also be accessed by those unable to use debit cards, said sources.
As per official data, about 34 lakh elderly people receive Rs 1,000 monthly old age pension. Of them, nearly 2.7 lakh beneficiaries have been receiving cash assistance through banking or post office correspondents, as they could not access ATMs.
These beneficiaries often face challenges with biometric authentication while using handheld devices at hill stations and remote locations due to internet connectivity issues.
Even without the introduction of micro-ATMs, the state has been distributing cash alongside Pongal gifts through its nearly 33,000 ration shops for the last decade, except in 2015 and 2021.
The practice started in 2014 with the distribution of Rs 100 with the Pongal gift hamper. The amount was increased to Rs 1,000 in 2019 and to Rs 2,500 in 2020. During the Covid-19 pandemic, a whopping Rs 5,604 crore was distributed at ration shops, with 99.9% of beneficiaries receiving the assistance without any disruption.
Practice started in 2014
The practice of distributing cash started in 2014 with the distribution of Rs 100 with the Pongal gift hamper. The amount was increased to Rs 1,000 in 2019 and to Rs 2,500 in 2020