In a big step towards realizing Prime Minister Narendra Modi's dream for a cashless India, the country's most profitable and third largest retail chain - Defence Canteens - are turning fully cashless from March 1 across the country.

"The canteen stores department (CSD) and the unit run canteens under it have been asked by the services to turn cashless from March 1 as they will sell goods only using plastic money"

The CSD has almost 1.2 crore direct customers in form of serving and retired personnel along with their families and had a turnover of over Rs 13,000 crore last year.

According to the sources, "In the army, orders were issued by the adjutant general's branch to canteens that they have to turn fully cashless from March 1 and the local formations have been asked to spread the message among the serving and retired personnel".

"The local formations have issued advisories to the retired personnel that they should arrange credit or debit cards by March 1 as the canteens are turning cashless" further added.

Says a source, "For military personnel, its easy to turn cashless as all their personnel get their salaries in their bank accounts and have already been issued debit cards by their respective banks a long time back".

The pensions of the retired soldiers and officers are also spend through banks and they have also been given the plastic cards.

The CSD has around 3,900 stores across the country from Ladakh in north to Andaman and Nicobar Islands.The CSD stores sell over 5,300 products at discounted rates .

Buying a car from a CSD canteen, costing 10 lakh in a local city showroom, can help in saving at least 80,000-90,000 due to exemption on payment of sales tax depending upon the model and make of the vehicle. Last year, the profits of the CSD exceeded that of the Future Retail and Reliance Retail as it earned 236 crore while other chains were far behind it in terms of profits.

The transaction in the canteens can be done only through using smart cards. 

Demonatisation also affect CSD sales  as many unit did not have card swapping machines and were transacting only through cash.

CSD's operating margin is one percent and the CSD claimed that it is the lowest of any retailer in the world.

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