Remember the long queues in front of Automated Teller Machines (ATMs) when the notes ban came into effect? The economy is staring at a similar scenario as 1.13 lakh ATMs across the country may be forced to shut down by March 2019, according to a report released on Wednesday. These numbers include approximately one lakh off-site ATMs and a little over 15,000 white label ATMs, stated the report by the Confederation of ATM Industry (CATMi). White label ATMs are set up, owned and managed by non-bank entities. Currently, the country has approximately 2,38,000 installed ATMs, as per the latest publicly available figures.
Here are five things you should know about the shutting down of ATMs as stated in the report:
1. A large number of ATMs in non-urban locations may be shut down due to unviability of operations. If this happens, the financial inclusion programme would be severely impacted as millions of beneficiaries under the government's Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme, who withdraw subsidies in form of cash through ATMs, may find their neighborhood ATM shut.
2. The closure of ATMs may result in considerable job losses that would be detrimental to financial services in the economy as a whole, said CATMi, a registered non-profit trade association formed by leaders in the ATM industry.
3. CATMi said that its members are already reeling under the financial impact caused by huge losses during and post-demonetisation as cash supply was impacted and remained inconsistent for months.
4. Revenues from providing ATMs as a service are not growing at all due to very low ATM interchange and ever-increasing costs, the report said. CATMi estimates an additional outlay of about Rs. 3,500 crore - only for complying with the new cash logistics and the cassette swap method of loading cash.
5. "The ATM industry in India has reached a tipping point, and 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," said CATMi, the top body of the domestic ATM industry.