Scrapped Rs500, Rs1,000 notes: Are ATMs ready for the currency notes switch?
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Mumbai: The government’s decision to withdraw Rs500 and Rs1,000 currency notes is likely to cause havoc in the automated teller machine (ATM) ecosystem as manufacturers get ready to adjust to new norms.
The process of ensuring there are enough currency notes in any given machine is also going to be a costly exercise for banks as they will have to ensure that there is enough legal tender available in the market.
In any ATM, there are four currency containers, known as ‘cassettes’, which can contain 2,500 individual currency notes each. So, in total, an ATM can only have a maximum of 10,000 currency notes at any given time. Each cassette can only contain one type of currency note. How many Rs.100, Rs.500 and Rs.1,000 notes are loaded in a machine is dependent on the location of the ATM and the number of transactions that happen.
Typically though, an ATM will not be loaded with over Rs.25-30 lakh in currency notes, since idle money would be a waste for the banks.
For ATM manufacturers, the most important thing to do now is to replace all Rs.500 and Rs.1,000 cassettes and replace them with Rs.100 and the new high-security Rs.500 and Rs.2,000 notes over the next two days, as the machines will start operations only on Friday (11 November).
New high-security Rs.500 and Rs.2,000 currency notes will be available in ATMs from 11 November, said finance secretary Ashok Lavasa on Wednesday, reported PTI.
“We and companies like us have created war rooms to design strategy and appoint people who will look at the developments in specific geographic locations. However, it doesn’t seem like we will be able to cover 100% ATMs in the next two days,” said Navroze Dastur, managing director, NCR Corp. India Pvt. Ltd, the country’s largest ATM manufacturer.
India has over 2.2 lakh ATMs spread across India, about 47% of which are controlled by NCR Corp.
According to Dastur, while there will be operational hiccups, the entire process is not too cost-intensive for ATM companies. However, this will be an expensive affair for banks, who are in charge of providing currency notes.
The other major process would be to ensure that the switch, which governs ATM transactions, has been reconfigured to handle large amounts of transactions. This, Dastur said, would be a small job, but will have to be done manually at each switch.
“We have handled demonetisation earlier and will do so again. Tomorrow (on Wednesday) banks will remain closed in order to withdraw these notes from counters and ATMs. We will strive to restock ATMs at the earliest and make them operational,” Arundhati Bhattacharya, chairman, State Bank of India, said in a statement on Tuesday.
According to a statement by the RBI, maximum withdrawal from at ATM per day has been limited to Rs.2,000 till 18 November, after which the limit will be moved up to Rs.4,000 per card.