Take Rs 200 notes to ATMs, RBI tells banks

Two people familiar with the matter said that the banking industry is likely to spend more than Rs 110 crore in implementing the regulator's order.

The Reserve Bank of India (RBI) has ordered banks to recalibrate ATMs to ensure that more numbers of the Rs. 200 denomination note is dispensed to the general public as part of its efforts to step up supply of lower denomination notes.

Two people familiar with the matter said that the banking industry is likely to spend more than Rs 110 crore in implementing the regulator’s order.

“RBI has asked banks and ATM manufacturers to ensure that ATMs start dispensing Rs 200 notes as soon as possible, it’s a good move as we need lower denomination notes vis-a-vis Rs 2000 notes,” said a banker aware of the direction but did not want to be identified. “It could take 5-6 months to fully implement this project.”

The central bank’s move comes amidst criticism that the very purpose of demonetisation of Rs. 500 and Rs. 1,000 currency notes in 2016 to curb corruption by Prime Minister Narendra Modi is being defeated with the circulation of a huge number of Rs. 2,000 notes.

Reducing Average Ticket Size of Withdrawals
The Reserve Bank may be looking to bring down the average ticket size of withdrawal from the ATMs which had gone up in the last one year, due to the availability of Rs 2000 notes in ATMs, say bankers.

Data shows that total value of cash withdrawn through ATMs has gone up to Rs 2.44 lakh crore at the end of September 2017 against Rs 2.22 in September 2016.

Since the Narendra Modi government banned old Rs 500 and Rs 1000 notes on November 8, 2016, the currency in circulation has reached 95% of the pre-ban levels and is presently at Rs 17 lakh crores, RBI data shows.

The banks which have been reluctant to tweak ATMs which would have to bear an estimated cost of more than Rs. 110 crores to recalibrate the over 2.2 lakh ATMs in India. The entire exercise is expected to be complete by next 6 months.

ATM industry veteran Loney Antony said the work of recalibration has just begun.

“It is a planned approach this time,” said Antony, MD – Hitachi Payment Services. “We have to identify clusters of ATMs and calibrate them. If this happened in a rush, may be the cost would have been higher, but it’s all planned.”

The exercise will involve installation of spacers to adjust the currency size. According to estimates average recalibration cost per ATM would be roughly Rs 5000.

In July last year the RBI had stopped printing Rs 2000 notes in favour of printing Rs 200 and other lower denomination currencies. Since, September Rs 200 were made available in the bank branches but were yet to reach the ATMs due to the recalibration issue.

Source: ET

Comments
Loading...