Mumbai: Indians will have lesser cash to use come March 2019 and it could spell a doom equivalent to demonetization.
 
As many as 1.13 lakh automated teller machines (ATMs) across the country might shut down by March 2019 owing to the regulatory changes that make ATM operations unviable because of the huge costs involved, the Confederation of ATM Industry (CATMI) said.
 
The regulatory changes include those on hardware and software upgrades, coupled with mandates on cash management standards and the cassette-swap method of loading cash. “These numbers include approximately one lakh off-site ATMs and a little over 15,000 white-label ATMs, the apex body of the domestic ATM industry said in a statement.
 
As per the latest RBI figures, there are about 2.21 lakh installed ATMs in the country. Other estimates suggest there are 2.38 lakh ATMs in the country.
 
ATMs in non-urban areas will be the worst-affected.
 
Closure of the ATMs will impact thousands of jobs and also the financial inclusion efforts of the government, the industry body said in a statement.
 
“A large number of ATMs in non-urban locations may be shut down due to unviability of operations. If this happens, the financial inclusion programme would be severely impacted as millions of beneficiaries under the government’s Pradhan Mantri Jan Dhan Yojana (PMJDY) scheme who withdraw subsidies in form of cash through ATMs may find their neighbourhood ATM shut,” said CATMi in a statement.
 
The industry body warned that this may result in long queues and chaos similar to what the country witnessed when ATMs were not dispensing cash in the aftermath of demonetization.
 
CATMi said that its members, which include ATM managed service providers (MSPs), brown-label ATM deployers (BLAs) and white-label ATM operators (WLAOs), are already reeling under the financial impact caused by huge losses during and post-demonetisation as cash supply was impacted and remained inconsistent for months. The WLAOs have accumulated losses and the compliance costs can result in over 15,000 machines run by them shutting down, the industry body added.
 
“The situation has further deteriorated now due to the additional compliance requirements that call for a huge cost outlay. The service providers do not have the financial means to meet such massive costs and may be forced to shut down these ATMs, unless banks step in to bear the load of the additional cost of compliances,” said the industry body.
 
It added that revenues from providing ATMs as a service are not growing at all due to very low ATM interchange and ever-increasing costs.
 
“In April, the RBI had mandated a minimum net worth of ₹100 crore for service providers and their sub-contractors handling cash management logistics on behalf of banks. It also directed cash vans transporting money to have CCTVs, GPS connectivity, tubeless tyres, hooters and wireless communication systems. Approximately 100,000 off-site ATMs, and over 15,000 non-bank ATMs could shut down,” Livemint reported.
 
According to CATMI, an estimated outlay of about ₹3,500 crore is needed to comply with the new cash logistics and cassette swap method. “These requirements were never anticipated by the industry participants at the time of signing contracts with the banks. Many of these agreements were inked four to five years ago,” the statement said.
 
“The ATM industry in India has reached a “tipping point”, and unless ATM deployers are compensated by banks for making these investments, there is likely to be a scenario where contracts are surrendered, leading to the large-scale closure of ATMs, the statement said,” the report added.
 

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Dates of the state polls remain uncertain as of now. Last week, the state government announced dates for the Std. X and XII examinations from February 10-March 15, 2017, a decision for which the state education secretary was reportedly summoned by the Chief Election Commissioner (CEC), New Delhi on Saturday (December 10). It is uncertain now what the outcome of the meeting has been. Technically, since the first session of the newly elected Akhilesh Yadav government in 2012 had only met in the first week of May 2012, there is time till mid April 2017 for the polls, before the five year statutory time expires.

The ET reports that it spoke to senior leaders of all major parties, top bureaucrats and police officers — many spoke on the condition of anonymity — to piece together the big picture where initial euphoria is slowly metamorphising into anger and frustration as the queues are not shortening. “Lucknow ka aadmi mauj aur aaram mein rehta hai…usse line mein khada hona pasand nahi hai. Woh ghar baith jayega par ab BJP ko vote nahi dalega, if this situation persists for two more weeks or so. (People in Lucknow are somewhat laidback and live a slow life. They don’t like to stand in queues. They will sit at home but not go and vote for BJP),” a senior political leader told ET. He said there were intelligence reports with the government of RSS workers also standing in queues and motivating people to not be restive or criticise the move – but the patience seems to be running out.

“Mohbhang ho raha hai (the euphoria is now fizzling out),” he said. The banking penetration is poor, compounding the problems. UP has just 18,000-odd bank branches and 19,143 ATMs to cater to over 20 cr people. Delhi with 1.2 cr people has 9,070 ATMs while Maharashtra with 11 cr population has nearly 25,000 ATMs.

Thinning crowds at the BJP's parivartan yatras have also been coming in. Fearing they may not get sizeable crowd for the mega rally to be addressed by Narendra Modi at Lucknow on December 24, Bharatiya Janata Party is likely to call it off. The mega rally was planned to mark the culmination of four parivartan yatras that began in the first week of November.

Sabrangindia has been reporting on the huge rural distress due to the ill-planned de-monetization decision of the Modi government. On November 22, the tragic incident of the death of a 65-year-old man was trampled to death outside a bank while standing in a queue to withdraw cash is sympomatic.Ramnath Kushwaha, a resident of Gulriha village, was caught in a stampede outside the State Bank of India branch on Monday. He was trampled by a crowd who had gathered to withdraw cash, SP Mohd Imran said. He had gone to withdraw money to make payments to a hospital where his pregnant daughter-in-law has been admitted, the officer said.

“..The real problem is banks have no cash. We have reports of queues of 400 people or more in towns and villages and the sudden announcement of cash finishing leading to people becoming aggressive. The problem is more acute in Eastern UP,” says UP Additional DG (Law & Order) Daljit Singh Chawdhary, the nodal officer to handle demonetisation law and order issues. Each day, he gets SOS calls from 2-3 bank bosses. “Nearly 40,000 policemen – that is 25% of the state police strength – are posted at banks. “But for the police, many banks would have been vandalised by now. UP DGP Javeed Ahmad has told policemen to exercise restraint and not do a lathicharge,” a state bureaucrat said.

On Sunday, December 11, prime minister Narendram Modi on Sunday told a BJP Parivartan Rally in Uttar Pradesh's Bahraich that 'gunda raj' will end in the state if his party is voted to power.The PM wasn't actually at the rally. His helicopter couldn't land in Bahraich due to low visibility caused by foggy weather.
 

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