Money & Banking

Despite rise in debit card issuance by banks, ATM numbers on the decline

K Ram Kumar Mumbai | Updated on March 20, 2019 Published on March 20, 2019

As non-performing assets surge, lenders reluctant to shell out ₹3,200-4,800 crore to introduce lockable cassettes in ATMs

While debit card issuance skyrocketed in the first 10 months of the current financial year, the number of ATMs has come down, creating a challenging situation for banks and inconveniencing customers.

The number of ATMs in the country has come down by 399 in the first 10 months of the current financial year at 2,21,848 ATMs as of January-end 2019.

During this period, debit card issuance soared by seven crore at 93 crore as of January-end 2019.

This situation, where the ATM network expansion is not in step with debit card issuance, could see ATMs running dry faster, requiring stepping up of the frequency of cash replenishment.

This development comes in the backdrop of the Reserve Bank of India asking banks and white-label ATM operators (WLAOs) to put in place measures, including lockable cassettes in ATMs (which will be swapped at the time of cash replenishment) and upgrading ATMs with supported versions of the operating system.

Further, banks are also weeding out old ATMs and those that are not viable.


Banks are staring at an expenditure of ₹3,200-4,800 crore to introduce lockable cassettes in ATMs. But they are reluctant to incur this expenditure due to the burden of provisioning towards bad loans.

Radha Rama Dorai, Managing Director, ATM and Allied Services, FIS, said: “ATM numbers have not been growing over the past one year.

“This is not a good situation, especially when the debit card issuance numbers are going up month-on-month and DBT (direct benefit transfer) dispensations are growing. DBT beneficiaries need ATMs to withdraw the amount given by the government.”

She observed that some banks have initiated the process of upgrading ATMs and reimbursing service providers for the increased costs, while others are shutting down ATMs that are not profitable.

Upgrading ATMs for compliance is a long drawn out and logistically challenging process, and one cannot expect full compliance across all ATMs in the country even by the end of this year.

Dorai underscored that various representations made by industry bodies to the regulator and the government for deferment or relaxation of deadlines have not yielded substantive results so far.

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Published on March 20, 2019
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