India ATMs: Nearly half may shut by March '19

Nearly half of the automated teller machines (ATMs) across the country are likely to be closed by March 2019 if new cash logistics norms are implemented.

There are 2,38,000 ATMs across the country and of this, an estimated 1.13 lakh ATMs, may have to be shut down as it requires an additional Rs 3,500 crore for complying with the new cash logistics and cassette swap method notified by the Reserve Bank of India, the Confederation of ATM Industry (CATMi) said.

CATMi represents ATM Manufacturing & Outsourcing Companies, White Label ATM Operators, Payment Services Companies, among others.

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

CATMi, which has around 30 members, including AGS, Tata Communications and BTI Payments, said these 1.13 lakh ATMs include one lakh off-site ATMs and over 15,000 white label ATMs.

According to the Ministry of Home Affairs' notification dated August 8, 2018, it has been estimated that there are over 8,000 privately owned cash vans plying across the country. Cash vans are being operated by non-bank private agencies which function as a service provider or outsourcing agency for the banking sector and currently carrying currency of over Rs 15,000 crore each day on behalf of banks and sometimes holding such currency overnight on behalf of banks at their private cash vaults.

A senior official of a public sector bank said that banks are in the process of coming out with a viable solution so that service providers need not bear additional expenses.

According to MHA, cash transportation activities shall be carried out only in secured cash vans fitted with GPS tracking device. Also, no cash loading of the ATMs or cash transportation activities shall be done after 9 PM in urban areas and after 6 PM in rural areas, and all these guidelines should be implemented before March 2019.

"If we comply with the new guidelines, we need at least Rs 3,500 crore and banks have not come forward to talk about it. Nobody wants to shut down ATMs, but if we need to operate them with new guidelines, we will be incurring 30%-40% more cost," said a CATMi spokesperson.

He added that large of number of ATMs in rural locations might be forced to shut down, and several hundred thousand jobs ride on the industry. "To manage an ATM, at least 12 people are required. ATM deployers are compensated by banks for making these investments. There is likely to be a scenario where contracts are surrendered, leading to a large-scale closure of ATMs. We want banks to act on it immediately," the spokesperson added.