Cash-out penalties may lead to closure of ATMs: CATMI
At present, about 42% of rural ATMs are loaded once a week, while 20% are loaded twice every week. The rest are loaded with cash on alternate days
The Confederation of ATM Industry’s (CATMI) has sought a retraction of Rs 10,000 penalty for cashout at any machine for more than 10 hours as it is not possible to ensure cash availability round the clock, which would result in closure of far-flung ATM machines, The Times of India reported on Wednesday. According to the presentation from CATMI, the norms would mean that 70-80% of semi-urban, rural ATMs and 20-30% of urban ATMs would be liable for the Rs 10,000 penalty, with the likely penalty on operators to be at Rs 80 to Rs 100 crore per month.
ATM closures will impact financial inclusion
If the current scheme is implemented then White Label ATM Operators (WLTAO), management service providers will be forced to shut down all far-flung ATMs which are difficult to operate. Presently, WLAOs are currently rolling out 600 to 700 ATMs per month in the interiors of the country, will be forced to curtail or close the operations, the Confederation said.
It also said that there are only two to three major cash replenishment agencies in the country and they are unable to service small towns and villages with the desired frequency. Adding to that, power outages in many semi-urban and rural areas of 8 to 10 hours disrupt cash loading.
At present, about 42% of rural ATMs are loaded once a week, while 20% are loaded twice every week. The rest are loaded with cash on alternate days.
CATMI also said that the closure of ATMs in areas that need them for the distribution of subsidies and benefits will lead to serious inconvenience for the under served segments of the society and will impact financial inclusion.