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1.13 lakh ATMs across the country by March 2019: CATMi
The closure of ATMs may result in considerable job losses that would be detrimental to financial services in the economy as a whole.
The Confederation of ATM Industry (CATMi), the apex body of the domestic ATM industry, has said that service providers may be forced to close down almost 1.13 lakh ATMs across the country by March 2019.
"Currently, India has approximately 2,38,000 ATMs, of which around 1,13,000 ATMs including 1,00,000 off-site and more than 15,000 white label ATMs are expected to down their shutters. This would severely impact millions of beneficiaries under the Pradhan Mantri Jan Dhan Yojana who withdraw subsidies in the form of cash through ATMs, besides urban centers, resulting in long queues and chaos akin to post-demonetization. CATMi step is forced on account of recent regulatory guidelines for ATMs hardware and software upgrades, recent mandates on cash management standards and the Cassette Swap method of loading cash" said V. Balasubramanian, Director, CATMi.
The body pointed out that these numbers include approximately one lakh off-site ATMs and a little over 15,000 white label ATMs. Currently, the country has approximately 2,38,000 installed ATMs, as per the latest publicly available figures.
CATMi said the forced closure is on account of unavailability of operations brought about by recent regulatory guidelines for ATMs hardware and software upgrades, recent mandates on cash management standards and the Cassette Swap method of loading cash.
It also said that the closure of ATMs may result in considerable job losses that would be detrimental to financial services in the economy as a whole.
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. CATMi estimates an additional outlay of about Rs 3,500 crore - only for complying 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 banks. Many of these agreements were inked four to five years ago when no such requirements were in sight.
These compliance costs may also see the 15,000-plus white label ATMs going out of business. WLA operators already have huge accumulated losses and are in no position to bear additional costs. ATM interchange, the only source of revenue for WLAOs, has remained static despite frantic pleas to increase the rates.