Transactions on automated teller machines (ATMs) in India have started growing more than two years after the demonetisation shock as cash supply is near normal and people are back to using the commodity for their daily needs, NCR the largest ATM supplier in the country said.
The amount withdrawn from ATMs has gone back to pre-demonetisation levels of Rs 2.53 lakh crore in October 2017, almost on par with the Rs 2.54 lakh crore withdrawn from ATMs in October 2016 which was pre demonetisation.
Amount of cash per day per ATM device is also back to Rs 4.08 lakh, close to the Rs 4.13 lakh it was in October 2016, indicating that cash supply is back to normal, NCR which with 48% market share is the largest ATM manufacturer in the country said.
“ATMs continue to be relevant. The reality is less cash and not cashless. For example lot of payment wallets only work in the metros and not in the rural areas. We will not be a cashless society very fast,” said Navroze Dastur, managing director at NCR.
Dastur said business was hit for six months after the November 8 demonetisation because cash was not available and ATMs had to be recalibrated to use the newly printed currency notes. “We faced losses during that period because a lot of logistics had to be changed but now we are back in the black. Last fiscal despite the stress our revenues grew 20% to Rs 2500 crore mainly as we also export ATMs from India. We expect the momentum to continue this year as well,” Dastur said.
Currency in circulation at Rs 17.39 lakh crore is still at 97% of the pre-note ban levels, latest data from the RBI shows.
On Thursday, Reserve Bank of India (RBI) said it is withdrawing a subsidies for banks to expand their ATM networks. The central bank had fixed the subsidy amount at 50% of the actual cost of the machine or Rs 2 lakh whichever is lower for urban centres and 60% of the actual cost of the machine in semi urban areas and rural areas or Rs 2.5 lakh whichever is lower.
Dastur said the withdrawal of the subsidy will have no impact on banks deploying ATMs. “Many banks did not use the subsidy anyway and more importantly the cost of an ATM machine has almost halved from Rs 12 lakhs to Rs 6 lakhs or even lower in the last few years so the lack of a subsidy will not have any impact,” he said.
To be sure, the total ATMs deployed across the country have inched up just 0.48% from 2.05 lakh machines in October 2016 to 2.06 lakh machines in October 2017 but Dastur said the data does not capture the 24,000 ATMs upgrades by banks and service providers.
NCR has got orders for opening more than 500 ATMs from white label ATM company VakrangeeBSE -4.98 % and 600 ATMs from a service provider on behalf of a bank. It has also built a 1000 ATM network for the India Post payments bank.
Last month, it sold 3800 ATMs owned and managed by it in Kerala, Bihar, Jharkhand and Lakshadweep to Electronic Payment & Services an ATM service provider.