ATM expansion slows due to note ban:

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.