STRATEGIC PARTNERS
May 25, 2016
In a country that has only about 18 ATMs per 100,000 adults to begin with, having one-third of them out of commission is an issue. And the Reserve Bank of India is treating it as such.
The Deputy Governor of the RBI, Shri S.S. Mundra, broke the news about the country's ATM crisis in a May 23 keynote presentation in Mumbai.
In his address to attendees at the Conference of Principal Code Compliance Officers, he said:
[O]ur teams have recently undertaken a survey of almost 4,000 ATMs across the country with sample size fairly representing geographies and bank categories.
Survey results are not comforting in any way. Almost one-third of the ATMs were found to be not working at that point.
Violation of regulatory instructions on display material, facilities for differently abled, etc., were also observed. We will be taking necessary supervisory action in this regard.
Mundra did not offer specifics about supervisory actions to be taken to increase ATM availability.
The policies of the RBI itself are at least part of the problem. India's retail bankers have complained that the central bank's ATM fee regulations make it extremely difficult to maintain their fleets.
One example: Retail banks are allowed to charge their own customers for using their home bank's ATMs (though many do not for fear of losing business), but they are obliged to allow off-us users five surcharge-free transactions per month in nonmetro locations, and three per month in larger cities.
Additionally, government entities have imposed Increased security demandson banks to protect customers using their ATMs. This includes hiring a night guard to protect the machine — or turning it off altogether during nighttime hours — and adding security cameras, among other requirements.
What's more, critics say, when RBI changed its rules in 2012 to allow independent ATM operators to set up machines under the auspices of a retail bank, the governors issued terms so restrictive that prospective operators who were initially gung-ho about the program scaled back their plans or walked away altogether.
