New Delhi: Banks are working out new strategies to reactivate dormant business correspondents—the agents who provide last-mile connectivity to customers in rural outposts—and deploy micro ATMs to provide cash in the countryside.
The government and banks have been scrambling to ensure that adequate cash is available in bank branches and ATMs after Rs1,000 and Rs500 bank notes were demonetized on 8 November.
With many of the around 200,000 ATMs in India still to be recalibrated to dispense new Rs2,000 and Rs500 currency notes, they are looking at other ways to address the cash crunch.
“Out of the 57,000-58,000 business correspondents who are registered with us, only around 33,000 business correspondents function in the true sense. We are focusing on activating the remaining dormant business correspondents rather than getting new ones on board,” said Manju Agarwal, deputy managing director, corporate strategy and new business, State Bank of India.
“A proper appraisal will take place and if it is found that the business correspondents are not functioning properly, their licences will be cancelled and new business correspondents will be appointed in their place,” she said.
On micro ATMs used to dispense cash, SBI has seen a fourfold surge in the number of daily transactions to around 100,000 since the scrapping of the high-value notes, Agarwal said.
Micro ATMs are card swipe machines through which banks can remotely connect to their core banking system. This machine comes with a fingerprint scanner attached to it. Micro ATMs are hand-held point of sale terminals used to disburse cash in remote locations where banks have no branches. Micro ATMs serve as a doorstep mobile banking arrangement-cum-mobile ATM device.
“Customers having cards or not can still withdraw money from micro ATMs. These were provided to make customer aware of the usage of debit card on a PoS machine and even if they do not have a card they can withdraw money by using their fingerprint,” Agarwal said.
Micro ATMs are linked to Aadhaar number.
Last week, the government said it will be introducing micro ATMs, especially in places like hospitals and high demand areas, to address cash shortages.
“Before demonetization, we were having around 3,000 transactions through our micro ATMs. Now, we are recording over 10,000 transactions per day. At present, no new BCs are being enrolled as we have adequate number as per rolls; instead, we are working on improving the efficiency of the existing BCs,” said a Canara Bank official who did not wish to be named.
“We plan to provide more than 10,000 PoS machines to our member establishment (ME) clientele which will help to reduce the physical transactions at branches as e- transactions will pick up at ME locations,” he added.
Payments solutions provider Oxigen Services India Pvt. Ltd also offer micro ATMs that accept debit cards by RuPay, which connect to the bank’s servers to help customers withdraw and deposit cash.
“We have plans to deploy 3,000 new micro ATMs next month especially across Bihar, Jharkhand, Uttar Pradesh, Orissa and eastern India and over a million in the next 3-4 years. The decision has been taken post demonetization considering the accelerated demand for digitization ,” said Sunil Kulkarni, deputy managing director, Oxigen Services.