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ATM expansion slows due to note ban:
Context:
A combination of factor, including demonetization of high values notes, have led to commercial banks cutting down on the number of automated teller machines (ATMs), particularly those not located in branches(off-site ATMs), latest RBI data showed.
Introduction:
- According to Reserve Bank of India (RBI), there were 98,092 off-site ATMs in June 2017 against 99,989 in the same month last year.
- On site (located within a branch) ATMs rose to 110,385 from 101,346 in the same period.
Demonetisation:
According to bankers, cash crunch due to demonetization, was one of the factors that impacted ATM expansion.
- The number of ATMs added between June 2016 and June 2017 was a little more than 7,000 while in the comparable period of the previous year, banks had added almost 16,000 ATMs and more than 18,500 in the year before.
- The total number of ATMs in the country in June 2017 was 2, 08,477 as compared with 2,01,335 a year ago.
- Large retail-focused banks like ICICI Bank and HDFC Bank’s off-site ATM numbers show a declining trend over the past one year.
- The overall ATM number at June end was also lower than in the same month of the previous year.
- However, SBI’s ATM numbers saw a sharp increase as it merged five of its associate banks and Bharatiya Mahila Bank on April 1, 2017.
Low footfalls
- The government’s push for digital transactions discouraging the use of cash is also having an impact, with banks going slow on ATM expansion, bankers pointed out.
- ATMs with low footfalls are being relocated. Some of these ATMs which were on-site, were installed following directions issued by the Finance Ministry during previous government regime.
- There is some amount of slowdown presently due to the availability of cash, which was s outcome of demoentisaton.
- NCR deploys almost 50% of the ATMs in the country.