Half Of India’s ATMs Might Shut Down By March: CATMi
According to several news portals, half of the Automated Teller Machines (ATMs) are going to get shut down by the end of March 2019.The reason behind this initiative by the government is due to the unavailability of operations, hitting hard both urban and rural population, and dealing a blow to the digitization policy.
According to CATMi Director V Balasubramanian currently, India has approximately 238,000 ATMs installed, of which around 113,000 ATMs, including 100,000 off-site and more than 15,000 white label ATMs, are definitely being expected to go down.
“This would severely impact millions of beneficiaries under the Pradhan Mantri Jan Dhan Yojana who withdraw subsidies in form of cash through ATMs, besides urban centres, resulting in snaky queues and chaos akin to post-demonetisation,” Mr Balasubramanian told IANS.
Adding to the previous conversation, he also said that the CATMi step is forced on account of recent regulatory guidelines for ATMs hardware as well as the software upgrades, recent mandates on cash management standards and the Cassette Swap method of loading cash, entailing huge investments by the industry and that to implement the Cassette Swap alone would need an additional outlay of Rs. 3,500 crores.
In April 2018, the Reserve Bank of India (RBI) imposed stringent guidelines for ATMs service providers or their contractors followed by the Union Ministry of Home Affairs issuing similar directives. These include a minimum net worth requirement of Rs.100 crores, minimum fleet size of 300 fully-equipped cash vans, two custodians and two armed guards plus a driver, GPS-CCTV, and the diktat for upgradation of the software from WindowXP to Window10.
“The RBI-MHA directives are to be implemented by the banks which must bear the costs, but they are not willing to discuss the issue, leaving us to fend for ourselves. Accordingly, from January onwards, we shall progressively start shutting down the ATMs,” he said.
Major industry players say that barring the metros and urban centres, people in states like Uttar Pradesh, Maharashtra, Bihar, West Bengal, Madhya Pradesh and others have to travel 40 km or more to access an ATM. “Moreover, as per official data, barely 30 per cent of bank account holders in the country regularly use their ATM cards… the others prefer cash transactions,” Balasubramanian said.
India has among the lowest ATM penetration globally, averaging 8.9 ATMs per 100,000 population as compared to Brazil’s 119.6, Thailand’s 78, South Africa’s 60 and Malaysia’s 56.4.