If this really happens, then the scare of demonetization will return to haunt entire India.
As per reports coming in, 50% of all ATMs in India will shut down, and stop working after March 2019.
50% Of ATMs Will Shut Down: Confederation of ATM Industry (CATMi)
Confederation of ATM Industry or CATMi is non-profit organization, which represents all “ATM Manufacturing & Outsourcing Companies, White Label ATM Operators, Payment Services Companies, Cash Replenishment & Cash in Transit Agencies, ATM Security Services & Solutions Companies etc. in India” (as per their website)
CATMi has issued a warning that by March 2019, almost 50% of all ATMs in India will shut down. There are 238,000 ATMs in India, out of which 113,000 ATMs can shut down.
Out of 113,000 ATMs, 100,000 are off-site ATMs and more than 15,000 white label ATMs.
How This Will Impact India?
Most of the ATMs which are expected to shut down are located in rural India, where cash is still the King and amounts to 80% of all transactions.
As per CATMi Director V Balasubramanian, this shut down of ATMs will impact Jan Dhan beneficiaries the most, as he said, “This (ATM shutdown) would severely impact millions of beneficiaries under the Pradhan Mantri Jan Dhan Yojana who withdraw subsidies in form of cash through ATMs, besides urban centres, resulting in snaky queues and chaos akin to post-demonetisation,”
Why ATMs Will Shut Down?
New rules an regulations pertaining to ATM usage and refills in India is being blamed for this extreme step.
In August this year, Govt. of India had issued new rules for all operating ATMs in urban and rural locations, and the cost of implementing these rules has been estimated as Rs 3500 crore, pan-India.
Now, banks are ‘silent’ on this issue, and this means that companies which operate ATMs will have to bear the cost.
Implementation of new software, hardware, the presence of security guards, timing of cash refill etc can be very costly, and ATM companies are helpless.
Balasubramanian said, “To implement all these security, software-hardware directive would entail an additional cost of minimum Rs. 150,000 per ATM per month. This works out to astronomical figures for all the 238,000 ATMs in the country,”
What Are The New Rules For ATMs?
Some of the new rules which will be come into force effective February 2019 are:
- Minimum Rs 100 crore net worth of ATM operating companies/service providers
- A minimum fleet of 300 fully equipped cash-vans must be present
- 2 custodians and two armed guards plus driver for every cash van
- GPS-CCTV in every cash van and ATM
- Upgrade to Windows 10 for every ATM machine
- No cash transfer after 9 PM in urban locations, and 6 PM in rural locations
As per CATMi, banks are also responsible to bear the costs in implementing these new rules, but they are willing to participate, and forcing the ATM service providers to manage on their own.
If ATMs start shutting down after February 2019, then it will cause much inconvenience and problems for the common man.
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