Operational Unviability To Result In Closure Of Half Of India's ATMs

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    In view of the recent regulatory overhaul in respect of both hardware and software upgradation as well as cash management mandates plus standards in relation to loading of cash, it is highly expected that operational unviability due to such changes might result in the shut down of almost half of India's ATMs.

    Operational Unviability To Result In Closure Of Half Of India's ATMs
     

    The resultant impact will be on the job condition as well as financial inclusion drive of the government wherein the majority of the beneficiaries take the ATM route for withdrawal of the different subsidies.

    Service providers may be forced to close down almost 1.13 lakh ATMs across the country by March 2019. These numbers include approximately one lakh off-site ATMs and a little over 15,000 white label ATMs," Catmi said in a statement today. The industry has reached a "tipping point".

    It is expected that in the next 5 months there can be a possible closure of 2.38 lakh machines.

    "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," it said.

    The new cassette swap method as well as management of cash logistics will result in the cost dealing of as much as Rs. 3,000 crore.

    The only way to salvage the situation for the industry, according to the body, is if banks "step in to bear the load of the additional cost of compliances". "Unless ATM deployers are compensated by banks for making these investments, there is likely to be a scenario where contracts are surrendered, leading to large scale closure of ATMs," it said.

    Goodreturns.in

    Story first published: Thursday, November 22, 2018, 8:49 [IST]
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