Business

Unviability of operations may shut down half of India’s ATMs by March 2019, warns CATMi

Updated : November 22, 2018 06:27 AM IST

Due to unviability of operations brought by recent regulatory guidelines may lead to the shut down of almost 1.13 lakh automated teller machines (ATMs) across the country by March 2019, the Confederation of ATM Industry (CATMi) said on Wednesday.

These numbers include approximately one lakh off-site ATMs and a little over 15,000 white label ATMs. Currently, the country has approximately 238,000 installed ATMs, as per the latest publicly available figures.

CATMi said the forced closure of ATMs by service providers came after the recent regulatory guidelines for ATMs hardware and software upgrades, recent mandates on cash management standards and the Cassette Swap method of loading cash.

The forced closure of ATMs would be severely impact millions of beneficiaries under the government’s Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme, who withdraw subsidies in form of cash through ATMs, may find their neighborhood ATM shut.

This may result in long queues and chaos similar to what the country witnessed when ATMs were not dispensing cash, post demonetisation.

As per CATMI estimates, the closure of ATMs may result in considerable job losses that would be detrimental to financial services in the economy as a whole.

CATMi said that its members, which include the ATM managed service providers (MSPs), brown-label ATM deployers (BLAs) and white label ATM operators (WLAOs), are already reeling under the financial impact caused by huge losses during and post-demonetisation as cash supply was impacted and remained inconsistent for months.

"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 costs and may be forced to shut down these ATMs, unless banks step in to bear the load of the additional cost of compliances," industry body said.

CATMi added that revenues from providing ATMs as a service are not growing at all due to very low ATM interchange and ever-increasing costs. It estimates an additional outlay of about Rs 3,500 crore – only for complying with the new cash logistics and cassette swap method.

Unviability of operations may shut down half of India’s ATMs by March 2019, warns CATMi

You May Also Like

COVID-19: NEET postponed to Sept 13, JEE-Mains to be held from Sept 1, says HRD Ministry

Retail next growth area for RIL; raising target price to Rs 1,900 by Mar, says SP Tulsian

Britannia Q4 meets analyst estimates; stocking by households to boost Q1, says co

Trending on CNBC-TV18

recommended for you