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Jun 20th, 2019 Comments Off on Bank ATMs Reduced In India

Bank ATMs Reduced In India

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Automated Teller Machines (ATM) is shrinking in number within India, even when people are using them more often lately, due to the stricter regulations banks need to follow that make it more expensive for them to run and maintain the machines.

 

The Reserve Bank of India (BRI) has shown figures that clearly state that bank ATM installation and operation has decreased for the past two years even though its use for transactions has increased in the same time frame. Because of this, the International Monetary Fund (IMF) has determined that India has the lowest quantity of ATMs per 100,000 people when compared to other BRICS nations.

 

Bank ATM installation and continued operation may still decrease and stagnate as the banks are struggling to meet the standards of security issued last year by the central back, as the cost for equipment upgrades and software has become costly. Prime Minister Narendra Modi is at risk of destabilising his own political campaign for monetary inclusion, as it had only been less than three years since he removed a great number of banknotes from circulation.

 

Rustom Irani, Hitachi Payment Services Pvt Ltd’s managing director, has stated that the continuous reduction of ATMs to be used by the population will be more painful for those that are in a lower class. As once of the providers of ATM machines in the country, the company knows that penetration in India is already very low.

 

Because the want for additional security using ATMs is getting more expensive, the revenue gained from operating these machines is not due to rise. ATM operators for banks and outside parties have been finding it less costly to pay an interchange fee rather than investing in their instalments for their own use, as said by former deputy governor for the RBI, R Gandhi. He then adds that these interchange fees are the reason behind the lack of growth in bank ATM installation.

 

However, even as the increase in cost for security is being implemented, not everyone agrees that it is the solution. Banks will then have a reason to increase the price of using their automated teller machines, says Indian Overseas Bank’s CEO, R Subramaniakumar.

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