As the Government of India has been pushing its citizens to go cashless since it announced the demonetisation of Rs 500 and Rs 1,000 currency notes on November 8, 2016, it looks like the move is finally having some impact. The country has seen a decline in the number of ATMs and between June and August 2017 the number has reportedly gone down by 358.
While the number may not be that big as of now, it is surely quite a change as the country has seen a huge increase in the number of ATMs in the last few years.
Since demonetisation, not many customers reportedly use the ATMs as frequently as they used to, due to which banks believe that they could do with a lesser number of kiosks. In tune, they also believe that the rent for these kiosks are quite high especially in metros, and lesser number of customers, in turn, increases the operational cost of these ATMs, reported the Times of India. Additionally, banks also have to take care of costs such as salaries of security personnel, electricity bill, and other maintenance expenses.
Meanwhile, the State Bank of India has also shuttered numerous ATMs after merging with associate banks. SBI had 59,291 ATMs in June this year and the number came down to 59,200 in August. Similarly, Punjab National Bank reduced the number to 10,083 from 10,502 and HDFC Bank to 12,225 from 12,230.
"We had to decide whether the footfall at an ATM justified its running costs. Most of the ATMs we shut down were at places where another SBI parent or associate bank ATM was within a 500-metre radius. Our customers will not be greatly inconvenienced because of this," an SBI official told the daily.
However, not all banks intend to shut down ATMs, but many have said that they may not be expanding their ATM networks anytime soon. "For further expansion, we would need to have sufficient volumes to justify the cost," TOI quoted Parthasarathi Mukherjee, CEO of Lakshmi Vilas Bank, as saying.
Meanwhile, ATMs have already faced quite some issues this year in May due to the WannaCry Ransomware, which affected many systems across the world. The RBI had then asked banks to operate their ATMs only after updating the software of these machines.