Demonetisation: ATM operators to seek compensation
As banks continue to starve machines of cash, the ATM industry is staring at a loss of hundreds of crores. As a result of this, ATM operators are now thinking of petitioning the government for compensation.
Managing networks on behalf of banks and often making capital investments in these machines, these operators own more than half the ATMs in the country from where they earn fees from banks for every transaction. The bank simply lends its name to the machine.
“If the government can compensate toll operators for loss due to demonetisation, they should do the same for ATM operators,” said Navroz Dastur, MD, NCR India — the largest ATM manufacturer, which also manages networks.
V Balasubramanian, president (transaction processing and ATM service), FSS, adds: “More than 60 percent of ATMs in the country operate on a per-transaction basis. Given the drop in volumes, the industry bore a loss of Rs 475-500 crore in November. We expect the same for December. While our revenues are zero, our costs have tripled. We ran additional shifts, we reconfigured all ATMs in minimum time.”
According to Mani Mamallan, founder of Electronic Payment and Services, distributing cash through ATM would mean that there is less scope for misuse as the machine does not discriminate between customers. He adds that even when there is no money to be dispensed, operators continue to incur all operational costs other than cash-related ones.
“Even when banks do refill ATMs, they give priority to ATMs owned by them, which is unfair as both the managed ATMs and network ATMs are the same brand,” said Mamallan. According to a senior official at Hitachi, the ATMs are operating at less than a tenth of their note-dispensing capacity.