MUMBAI Changes in regulatory landscape are making operating ATMs unviable, and may lead to the closure of half of the 2.38 lakh machines in the country by March 2019, the Confederation of ATM Industry (CATMi) warned Wednesday.
Closure of the ATMs will impact thousands of jobs and also the financial inclusion efforts of the government, the industry body said in a statement.
“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,” it said.
The industry has reached a “tipping point”, the body added.
A majority of the ATMs which will have to be shut down are in the non-urban areas, it said, underlining that this can impact the financial inclusion efforts as beneficiaries use the machines to withdraw government subsidies.
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.
The new cash logistics and cassette swap method will alone result in costs of Rs 3,000 crore for the industry, it estimated.
It added that the ATM industry, including managed service providers, brown-label ATM deployers and white label ATM operators (WLAO), is still reeling under the shock of demonetisation.
“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 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 a 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.
The WLAOs have accumulated losses and the compliance costs can result in over 15,000 machines run by them shutting down, the industry body added. (PTI)
Follow this link to join our WhatsApp group: Join Now
Be Part of Quality Journalism |
Quality journalism takes a lot of time, money and hard work to produce and despite all the hardships we still do it. Our reporters and editors are working overtime in Kashmir and beyond to cover what you care about, break big stories, and expose injustices that can change lives. Today more people are reading Kashmir Observer than ever, but only a handful are paying while advertising revenues are falling fast. |
| ACT NOW |
| MONTHLY | Rs 100 |  |
| YEARLY | Rs 1000 | |
| LIFETIME | Rs 10000 | |
