Will the ATM Industry Sustain in Its Current Condition?
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The deployment of ATMs has finally surpassed 250,000 units, after hanging between 225,000 and 235,500 for the last five years. The move to increase the interchange from Rs 15 to Rs 17 concerning financial transactions (and from Rs 5 to Rs 6 concerning non-financial transactions) was seen as a relief. The move with respect to increasing the interchange on cash-pullouts was less than Rs 18 back in 2012.

Though the RBI circular has been issued in the public interest, the penalty is not probably going to resolve the cash availability concerns. The primary reason for the problem is inadequate cash forecasting, failing to implement the April 2018 RBI circular that covers aspects such as the periodic release of intent, the cassette swap-system, and ATM-fit currency.

Soon, it may take longer to locate an Automated Teller Machine (ATM) near you. This is because, from 1 October, banks will be levied with a fine worth Rs 10,000 each time a till-box goes empty for more than ten hours.

The ATM business is already suffering since it bears high costs to comply with the security regulatory guidelines. Rs 10,000 as a penalty per day is close to nearly 30% of the monthly revenues. If deployers plan to shut ATMs, there will be a direct impact on the Jan Dhan Yojana account holders as they need ATMs to withdraw their direct benefit transfers.

In March 2021, the value and volume of ATM transactions stood at Rs 285,268 crore and 6,040 lakh, respectively — not too different compared to the numbers of February 2020, that is, Rs 283,280 crore and 6,189 lakh.

Rural ATMs are facing more significant difficulties. As per the stats, developed countries face cashouts for 11 hours in urban areas and metros; cashouts in rural areas have been seen for 36 to 44 hours.

The other issues include logistics related to picking up of cash from Currency Chests (CCs), delays in loading ATMs with money due to poor infrastructure and power cuts, limitations on the cash load timings after its dark, cash losses because of robbery, and stress due to creaky infrastructure due to cassette swaps.

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For any clarifications/feedback on the topic, please contact the writer at bhavana.pn@cleartax.in

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