Modi Govt. Demonetisation drive resulted in the decline of 358 ATMs

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Slogan of the Modi “acche din ayenge,” and “making India Digital” is somehow we can say is very correct, Demonetisation was a major step taken by the government, People at the time of demonetisation faced many difficulties, even the economic growth of the country also got deceased due to it, But at the same time the result is revealing the actual benefit of it,  as Modi-government’s took the decision of demonetisation and this push people towards a cashless economy, which resulted in decline of ATMs and between June and August 2017.

In past four year ATMs increased at a compounded rate of 16.4% But, now the growth rate has slowed to 3.6% after demonetisation last year (2016), this is for the first time the number of ATMs has declined.

After the announcement of demonetisation of Rs 500 and Rs 1,000 currency notes on November 8, 2016, the result is that the country has seen a decline in the number of ATMs, nearly 358 ATMs has been shut. The number is not that big but still, it shows that there is a change, as because in the last few years the number of ATMs increased in a huge number.

After demonetisation, the use of ATMs has been decreased too much in comparison to the previous use, so for this, the banks believe that they could do with a lesser number of kiosks and it is also believed by them that the rent for these kiosks are quite high especially in metros, and lesser number of customers, in turn, increases the operational cost of these ATMs.

But at the same time, the workload of banks have also increased, As per the Banks record, rentals for a 7×5-sqft kiosk at airports and prime locations in Mumbai can go up to Rs 40,000 a month. Metros like Chennai and Bengaluru, ATM site rentals range from Rs 8,000 to Rs 15,000 and now the bank has to take care of costs such as:

  • Salaries of security personnel
  • Electricity bill
  • Other maintenance expenses

The State Bank of India after merging with associate banks has now shuttered numerous ATMs:

  • Previously in June SBI had 59,291 ATMs, which declined to 59,200 in August.
  • Similarly, Punjab National Bank reduced the number to 10,083 from 10,502.
  • Even the number of HDFC Bank ATMs reduced to 12,225 from 12,230.

In an earlier interview, Paresh Sukthankar, deputy MD of the bank, “There has been a shift in customer behaviour from cash to electronic payments, Customers who were earlier using their debit cards only for ATM withdrawals are now using them for transactions at shops. Teller transactions at branches as well as ATMs have seen a reduction or are flattening out.”

An SBI official told that “Our customers will not be greatly inconvenienced because of the shutdown, We had to decide whether the footfall at an ATM justified its running costs. Most of the ATMs we shut down were at places where another SBI parent or associate bank ATM was within a 500-meter radius,” There are only a few banks who had intended to shut down the ATM, not all, but many have said that they may not be expanding their ATM networks anytime soon. “For further expansion, we would need to have sufficient volumes to justify the cost,” said Parthasarathi Mukherjee, CEO of Lakshmi Vilas Bank.

This year in May due to the WannaCry Ransomware, ATMs have faced quite some issues, which affected many systems across the world. The RBI had then asked banks to operate their ATMs only after updating the software of these machines.
Digital payments have increased after demonetisation eight out of every 10 ATMs are located in cities where digital payment is easy.
Sanjeev Patel, CEO, Tata Communication Payment Solutions “said More than 83% of ATMs are in urban locations, servicing 33% of the nation’s population that has access to net banking, wider point-of-sale network, e-wallets, mobile banking apps, etc, for the transactions.”
He further added that “The people who desperately need cash are in rural locations where only 15% of the more than 2 lakh ATMs serve nearly 67% of our population.” ATM operators say they need to focus on rural areas now. “Urban India has already got onto the digital bandwagon, rural India has not.”
So, in the very end we can say that “acche din aa rahe hai.”

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