Dry ATM: Bread without butter
Though an ATM offers several services, cash dispensation is perhaps the most important for most users.
Apart from the advent of the internet, the biggest structural consumer-centric change in banking in India over the past 75 years has been the introduction of automated teller machines or ATMs in 1987 when HSBC unveiled the first one in Mumbai. Like the PCO revolution, it didn’t take the consumer long to appreciate the utility of this round-the-clock service. Over the years, they earned popularity as “any time money” outlets. As usage grew, a new irritant cropped up, that of dry ATMs, or machines running out of cash. Though ATMs offer several services, cash dispensation remains the most popular utility.
Therefore, RBI’s move to penalise banks for an ATM being out of cash for 10 hours or more is welcome. In a strict move, the central bank has enjoined banks to submit a report by the fifth day of every month on for how many hours did its ATMs run dry. Banks would have to pay a penalty of Rs 10,000 per ATM staying dry for more than 10 hours in a month.
For a large number of citizens, ATMs virtually represent the entire bank. Many do not need to visit the branch and visit only ATMs. Though mobile phone apps have taken the digital revolution a step further and almost all retail operations are available on fingertips, a large section of the people is comfortable with ATMs. Though there have been cost issues of maintaining ATMs and there has been a small decline in their number, banking services without ATMs cannot be conceived in the country.
Moreover, due to the pandemic, the circulation of cash has gone up to more than a decade high levels in the economy. The safety protocols also require less crowding at public places in the foreseeable future. ATMs serve both these crucial purposes. It is not for nothing that ATM-cum-debit cards are being issued to Jan-Dhan account holders. It is the first step in non-physical banking.
The central bank’s step to penalise the banks for dry ATMs is a reminder to the banks for proper customer service. An ATM without cash is like bread without butter.