Half of India’s ATMs Will Shut Down By March 2019: Industry Body
Here’s why half of India’s ATMs may shut down by March next year
Regulatory changes are making it unviable to operate ATMs and may lead to the closure of half of the 2.38 lakh machines in the next five months, the Confederation of ATM Industry (CATMi) has warned.
“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”.
Closure of the ATMs will impact thousands of jobs and also the financial inclusion efforts of the government, it said. A majority of the ATMs which can be shut down will be in the non-urban areas, it said.
The industry body said that recent regulatory changes, including those on hardware and software upgrades, coupled with mandates on cash management standards and the cassette swap method of loading cash, will make ATM operations unviable, resulting in the closure.
CATMi added the ATM industry – including managed service providers, brown-label ATM deployers and white-label ATM operators – is still reeling under the shock of demonetisation.
The only way to salvage the situation, according to the body, is if banks "step in to bear the load of the additional cost of compliances." Further, the body adds, that "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.
Revenues for providing ATMs as a service are not growing at all due to very low ATM interchange charges and ever-increasing costs, it said, adding that such changes in the landscape were not anticipated while signing contracts with the banks.
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