Daman and Diu: Hailed as ‘first cashless region’, a reality check from the ground

IT IS a familiar sight by now. A long line of people are waiting outside the State Bank of India (SBI) branch in Bucharwada, in Diu, the tiny union territory located off the south coast of Gujarat. One woman claims that she has been waiting since 6 am. At 11:30 am, the iron-grill door of the bank remains locked.

A few kilometres away, there are similar queues outside the SBI’s Wanakbara branch. Three policemen stand guard, trying to keep the crowd in check. The lone ATM in the building is not functioning. It is the same story at the other banks too.

Earlier this week, Union Minister of State for Home Hansraj Gangaram Ahir “commended the UT administration for taking the initiative to make Daman and Diu the first cashless region of the country”.

But a visit to the ground shows that it still has a long way to go.

While Diu is a popular watering hole for tourists from dry Gujarat, only one of its 200-odd bars has a Point of Sale (PoS) machine, according to office-bearers of the Diu District Liquor Association (DDLA). About 60 bars run by hotels accept online and cheque payments, the rest depend on cash transactions.

“We have applied for two PoS machines, and the banks have assured that they will be delivered early next month. Till then, we have to continue to deal in cash,” says Shyamji Vaishya, owner of Royal Wine Shop in Bandar Chowk.

Vaishya, who is also DDLA secretary, is one of the main liquor wholesellers in Diu. He says his wholesale business too depends on cash payments. “While hotels don’t make cash payments, the smaller bars still deal in cash. About 30 to 40 per cent of the payments that I receive is in cash,” he says.


At Deepee Bar, which is the only one with a PoS machine, 20 per cent of the transactions are in cash. “People from rural areas pay in cash… But those who drink costly brands pay by debit or credit card. While we have had this machine for the last two years, cashless transactions were very rare before November 9,” says its owner, Hardik Sheth.

At ‘Honest Enterprise’, a general store nearby, cash transactions are the norm. “I submitted an application to SBI for a PoS machine 25 days ago. But bank officials say it will take time. Accepting cheque payments for small amounts is inconvenient,” says its owner, Imran Vora.

Bipin Shah, the owner of ‘Suresh Stores’, a hardware and paints shop in Main Bazaar, says nine out of 10 transactions are in cash. The rest is in cheque, usually for high-value transactions.

Daman has about 60 liquor shops and over 260 bars and restaurants which serve liquor. Mahesh Patel, president of the Daman Wine Merchants Association, says only outsiders who buy at least a crate pay by card. “There is a shortage of PoS machines. The consumers are mostly industrial workers, residents and tourists from South Gujarat,” he says.

Deputy Collector Karanjit Vadodariya says there are nearly 535 PoS machines which are operational in Daman. “The change will not come overnight, but we are progressing,” he says.

Satyendra Singh, who owns a textile factory, says he has opened bank accounts for 400 workers. “Earlier, we would make cheque payments to the labour contractors, who would then withdraw the cash and distribute it,” he says.