Economy

Banks stingy with cash, says ATM industry

A view of an ATM where 'no cash' board is hung outside, in Hyderabad.

A view of an ATM where 'no cash' board is hung outside, in Hyderabad.   | Photo Credit: K.V.S. Giri

Members of the automated teller machine (ATM) industry have blamed banks for not supplying adequate cash which has resulted in the acute shortage of cash in several parts of the country this month.

“Things were fine till March, in terms of ATM transactions, but last few days we are having serious problem with cash,” said V. Balasubramanian, a spokesperson for the Confederation of ATM Industry (CATMi), the industry body for ATMs.

“This is across the country except for may be in Tamil Nadu and Kerala,” Mr. Balasubramanian told The Hindu.

Drastic fall

According to CATMi, earlier banks were meeting 90% of the demand from ATMs but the figure has now come down drastically — particularly public sector banks, who are now meeting only 30% of the demand. Private sector banks are still meeting 60% of the demand.

 

Of the two lakh ATMs in the country, about 75% belong to public sector banks. Public sector banks also run 3,845 out of 4,034 currency chests in the country.

Mr. Balasubramanian said generally two to two and half days of cash were loaded into the ATMs but that is not happening now. As a result, ATMs are running dry quickly.

“The question we keep on asking public sector banks is that [since] your main channel [of cash dispensation] is the ATM then why you are not giving it,” he added.

The current cash shortage comes even as currency in circulation is more than 100% of the pre-demonetisation levels of first week of November 2016. According to RBI data, currency in circulation was ₹18.43 lakh crore in the week ended April 6, 2018 as compared to ₹17.97 lakh crore as on November 4, 2016.

 

“Cash is back with a vengeance,” said Navrose Dastur managing director, NCR Corp’s India operations. NCR deploys a majority of the ATMs in the country.

“It is very clear that there is a demand-supply issue. We saw this happening two months back also but in selected geographies like Andhra Pradesh, Telengana and Karnataka. But now it is happening in much larger geographies. All of a sudden there is a huge demand for cash,” Mr Dastur said.

He said in the last few months average ticket size of the ATM withdrawals has increased, indicating that demand for cash has increased.

“While currency in circulation is back to the pre-demonetisation levels, we should also remember that in these 18 months, the economy has also grown. So the cash in circulation should have been higher than ₹18 lakh crore,” he said adding the government probably felt that digital transactions would bridge this gap, which has not happened.

Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | Sep 20, 2020 10:50:32 AM | https://www.thehindu.com/business/Economy/psu-banks-not-meeting-atm-demand-says-industry/article23576441.ece

Next Story