Shankar said, “The idea behind imposing penalty on outages at ATMs was to ensure that these services are available as far as possible in areas with less attention to ATMs, which are largely rural and semi-urban areas. Is.” “We have received various responses, some positive while some raising concerns. There are issues specific to the location (of the ATM). We are trying to take all the feedback and review and see how it can be implemented in the best way.
ET in its September 9 edition was the first to report that the lenders had approached reserve Bank of India They are seeking to relax their plan, citing issues of refilling ATMs in rural areas that could significantly drive up costs and make business impractical.
In August, the banking regulator directed banks and white label ATM operators to strengthen systems that would allow them to monitor cash availability at ATMs and ensure timely replenishment to avoid cash-out situations. Under the circular, a fine of Rs 10,000 per ATM will be levied for cash outs exceeding 10 hours in a month.
Banks believed that the availability of cash in rural areas would decrease as the cost of setting up and maintaining ATMs is high.
“The cost of transporting ATM-fit notes in rural India is very high due to the distance between ATMs and the sparse network,” said a banker on the condition of anonymity. “Generally cash management companies and ATM service providers visit once in a few days to replenish the cash and fix other technical or hardware issues.”
Banks are gradually reducing the presence of ATMs as they incur overall cost of operation. Recently, small finance bank Suryoday decided to shut down all its 26 automated teller machines, giving customers the option to use their debit cards at other banks’ ATMs, eliminating such machines altogether. became the first domestic lender to The small finance bank is devising a strategy where it will provide 5-7 transactions per month free of cost to its customers when they use the ATM network of other banks to withdraw cash.
There were 2.13 lakh ATMs in the country at the end of August, as against 2.09 lakh in the same period last year, which is a marginal increase of 1.5%. On the other hand, micro-ATMs have grown to 4.94 lakh as against 3.07 lakh in August last year, which is an increase of over 60%.
To make business more viable RBI has recently increased interchange fee Rs 15 to Rs 17 on ATM transactions. ATM interchange is a fee paid by the bank that issued the card (the issuer) to the bank where the card is used to withdraw cash (the acquirer).
In addition, the limit on the customer charges, which is limited to Rs 20 per transaction, has also been increased to Rs 21.