Prabhatesh Tripathi @ Delhi: The ghost of demonetisation past is still haunting and is once again ready to venture into your homes as you may not find your favourite ATM kiosk functional from April 1. Even after more than two years of execution the Demon-etisation is not ready to relent and is claiming more jobs as ATMs are shutting down. In Madhya Pradesh alone over 540 ATMs have been shutdown banks between 2017 and 2018 as per the data of Reserve Bank of India.
Most affected are the small banks who have been forced to let go of the vendor services due to increasing up keep costs. The security guards and maintenance staff entrusted to these ATMs are now left unemployed adding thousands to already looming crisis of unemployment.
Early warnings were given
Confederation of ATM Industry in 2018 had warned the Union government that changes in ATM industry regulation will lead to closure of over 1 lakh ATMs across the country. The shutting down of ATMs will impact thousands of jobs and the financial inclusion initiatives if the government. ATM industry sources said that over 2,100 ATM’s were closed across the country by the end of current financial year. They said that Rs 2,000 denomination for which the first re-calibration had to be made started the troubles. Currently the biggest denomination is unofficially not available with the banks or is seldom available.
Strict RBI norms
Further the cassette swap mandate put in RBI last year impacted the sector by large. RBI had mandated requirement of three sets of five cassettesone set in ATM, one for transit and the third with bank branch for reloading as per necessity. Each cassette costs around Rs 20, 000 so for a single ATM the cassette cost is alone Rs 3 lakh.
Big public and private sectors are not much affected such as State Bank of India or ICICI Bank, but it is the medium size banks such as Central Bank of India, United Bank of India or Bank of Baroda that have been forced to close large number of ATMs.
An Indore based businessman on condition of anonymity said, I own a fueling station and have my daily transaction done with the Bank of Baroda. The condition of cash availability so poor that they wait for customers with cash chunk to deposit and start daily operations. The condition some-days reach to a point where they call up my manager to come with cash as they have to start daily business.
Government is already compensating ?
Banks with big market cap are adjusting to the new norms as they have their own ATMs while other banks provide services through vendors and vendors are not compensated by them. The CATMi in November 2018 had reportedly called for banks to compensate the vendors for recalibration costs. Interestingly the PM Narendra Modi led Union government maintained that recalibration cost is incurred by the banks.
Replying to a question of AIMIM member of parliament Asaduddin Owaisi the government on January 4, 2019 replied As informed by Indian Banks Association, banks incur cost of every recalibration. An e-mail sent to CATMi for a comment remained unanswered till writing of this article.
The government also said, As apprised by the Public Sector Banks, while they do not have any plan to shut down their ATMs, they have also initiated necessary steps to comply with the guidelines issued by RBI on various control and risk mitigation measures for ATMs.
Rural areas worst hit
As per RBI data Bank of India had 702 ATMs across Madhya Pradesh by December 2017. Come December 2018, the bank had closed 78 ATMs reducing the number to 624. The situation is worse in rural areas where the residents are facing most issues. These areas have a few branches, so is the situation of ATMs. Most of the times 10 percent ATMs remain dysfunctional due to technical snags or unavailability of cash. In such situation the bank account owners in these areas have to travel longer distance for cash.
Already poor penetration
Not just rural areas but the urban populace may also bear the burden of lesser ATMs. According to CATMi, a total of almost 7-10 lakh ATMs are required in the country to adequately cater to the population of the country in comparison to current availability of around 2.38 lakh ATMs. It is worth mentioning that India has the lowest ATM penetration globally, with an average of 8.9 ATMs for one lakh people in comparison to 119.6 in Brazil, 78 in Thailand and 60 in South Africa.
Congress charges BJP
Madhya Pradesh Congress media in-charge Shobha Oza said Where is chowkidar now as people are losing jobs, they are left with less cash and our financial institutions compromised. Voicing concern for the industry she said the BJP government is busy helping Bhai then why it should care for common people.