Mumbai: The ATM industry has made a representation of the Reserve Bank of India (RBI), looking for revocation of RS 10,000 penalty for any payment on the machine for more than 10 hours.
According to the presentation by the ATM Industry Confederation (CATMI), a remote engine must be closed because it is impossible to ensure the availability of cash all the time.
In the presentation distributed with the media, Catmi said that the norms mean that 70-80% of semi-urban & rural ATMs and 20-30% urban ATMs will be responsible for the 10,000 Hospital penalty and the possibility of a penalty on the operator will become RS 80- 100 Crore per month.
The Confederation has said that there are only two-three cash filling agencies in the country and they cannot serve small cities and villages with the desired frequency.
In addition, 8-10-hour power outages in many semi-urban areas and rural areas interfere with cash loading.
At present, around 42% of rural ATMs are loaded only once a week while 20% are loaded twice every week.
The rest is loaded with cash on alternative days.
“If implemented, the current scheme will force prohibitions, white ATM-label operators (WLTAO), the management service provider to turn off all ATMs that are too flap that is difficult to operate.
WLAOS, which currently launches 600-700 ATMs per month in the country’s interior, will be forced to enter / reduce or close the operation, “Confederation said.
Catmi added that the closure of ATMs in areas that need it for the distribution of subsidies and benefits will mean serious discomfort for the segment of society that is not in charge and will affect financial inclusion.
It is said that the Bank has begun to introduce contract penalty clauses with management service providers (or MSP, companies that manage ATM networks on behalf of banks at a cost).
In the request of the proposal, the large public sector bank has said that MSP will face a cashout penalty of Rs 1,000 if there is no cash for 4-8 hours, Rs 2,000 (up to 24 hours) and Rs 4,000 for more than the 24-hour cashout situation.
“For ATM Operators of the white label and MSP with a low transaction volume of around 80-90 per day, this penalty is 25-30% of income.
With such a big penalty, the MSPS / Wlao model will be dead.
Cumulatively, all WLAOS produces around RS 90 Crore per month and this retribution will be Rs 25-30 Crore per month, “Confederation said.