The Confederation of ATM Industry on Wednesday warned that almost 50% of automated teller machines across India could shut down by March 2019 because new regulatory rules haev made their operations non-viable. The association’s spokesperson said 1,13,000 of 2,38,000 ATMs are likely to be shut down.
The Confederation of ATM Industry describes itself as a non-profit trade association representing ATM manufacturing and outsourcing companies among other firms.
The organisation warned that the shutdown could lead to queues outside ATMs and chaos similar to when the Centre demonetised Rs 500 and Rs 1,000 notes on November 8, 2016. Prime Minister Narendra Modi had demonetised the notes in a sudden move, claiming it would end the flow of black money, among other things.
The organisation said in a statement that the new rules – including those governing ATM hardware and software upgrades, and mandates on cash management standards and cash loading methods – had placed a major financial burden on firms operating ATMs in the country. “A large number of ATMs in non-urban locations may be shut down due to the non-viability of operations,” the statement said. “If this happens, the financial inclusion programme would be severely impacted. Millions of beneficiaries under the government’s Pradhan Mantri Jan Dhan Yojana scheme, who withdraw subsidies in form of cash through ATMs, may find their neighborhood ATM shut.”
The confederation’s member firms, the statement claimed, are already struggling with the costs of complying with the new rules as they are still reeling from losses incurred during demonetisation. “The service providers do not have the financial means to meet such massive costs and may be forced to shut down these ATMs, unless banks step in to bear the load of the additional cost of compliances,” the statement said.
In July, the ATM operations industry had said banks will need to pay Rs 100 crore to recalibrate ATMs to dispense the newly-introduced Rs 100 notes, PTI reported.