Sat. Aug 24th, 2019

50% Of ATM’s Will Be Shut By March In India

Nearly half of the automated teller machines (ATMs) in India will be rendered commercially unviable because of onerous regulatory requirements, forcing a shutdown, and potentially leading to cash shortage and long queues, similar to the days following demonetization in 2016.

Recent regulatory guideline for ATM hardware and software upgrades, cash management standards, and cash loading methods will render almost 113,000 ATMs unviable, the Confederation of ATM Industry (CATMI)said on Wednesday in a statement.

“A large number of ATMs in non-urban locations may be shut down due to unavailability of operations. If this happens, the financial inclusion programme would be severely impacted as millions of beneficiaries under the government’s Pradhan Mantri Jan Dhan Yojana (PMJDY)scheme, who withdraw subsidies in the form of cash through ATMs may find their neighborhood ATM shut,” the CATMI added In April, the Reserve Bank of India (RBI) had mandated a minimum net worth of Rs 100 crore for service providers and their sub-contractors handling cash management logistics on behalf of banks. It also directed cash vans transporting money to have CCTV, GPS connectivity, tubeless tires, hooters, and wireless communication systems.Approximately 100,000 off-site ATMs,and over 15,000 non-bank ATMs could shut down.

According to RBI data, INDIA HAD 221,492 ATMs as of September-end.”The situation has further deteriorated now due to the additional compliance requirements that call for a huge cost outlay. The service providers do not have the financial means to meet such massive cost and may be forced to shut down these ATMs unless bank step in to bear the load of the additional cost of compliance,” the CATMI said in the statement.
According to CATMI, an estimated outlay of about Rs 3,500 crore is needed to comply with the new cash logistics and cassette swap method.
“These requirements were never anticipated by the industry participants at the time of signing contracts with the bank. Many of these agreements were inked four to five years ago,” it said.

Leave a Reply

Your email address will not be published. Required fields are marked *

Share via