The Confederation of ATM Industry (CATMi) warned Wednesday that changes in regulatory landscape are making it unviable to operate ATMs, and may lead to the closure of half of the 2.38 lakh machines in the country by March 2019.
Closure of the ATMs will impede financial inclusion efforts of the government and impact thousands of jobs, 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 industry body added. A majority of the ATMs which can be shut down will be 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.According to an estimate, the new cash logistics and cassette swap method will alone result in costs of Rs 3,000 crore for the industry. 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 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”.