Money & Banking

Half of India’s ATMs likely to close down by March: CATMi

Our Bureau | | Updated on: Nov 21, 2018
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ATM service providers may be forced to close down almost half of the 2.38 lakh ATMs by March 2019 due to unviability of operations, thereby impacting the government’s financial inclusion programme, according to the Confederation of ATM Industry (CATMi).

The industry body has estimated that 1.13 lakh ATMs may have to down shutters across the country by March 2019. 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 lakh installed ATMs, as per the latest publicly available figures

“A large number of ATMs in non-urban locations may be shut down due to unviability of operations. If this happens, the financial inclusion programme would be severely impacted as 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,” said CATMi in a statement.

The industry body warned that this may result in long queues and chaos similar to what the country witnessed when ATMs were not dispensing cash.

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 the forced closure is on account of unviability of operations brought about by recent regulatory guidelines for ATM hardware and software upgrades, recent mandates on cash management standards, and the cassette swap method of loading cash.

CATMi said that its members, which include 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,” said the industry body.

It added that revenues from providing ATMs as a service are not growing at all due to very low ATM interchange and ever-increasing costs.

Published on November 21, 2018

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