PNB assures no plans to reduce ATMs; will not increase usage charges

A day after the Confederation of ATM Industry (CATMi) warned of shutting down over 1.13 lakh ATMs by March 2019 due to the unviability of operations, state-owned Punjab National Bank (PNB) has said it has no plans to reduce the number of its ATMs. "PNB would like to clarify that it has no major plans to reduce ATMs by March 31 2019," the bank said in a statement. The bank has also assured that it will not increase various charges related to the ATM usage. This has also ended speculations that banks would ultimately pass the buck on to customers. However, other banks are yet to issue any such statement on the matter.

The CATMi had said changes in the regulatory landscape were making it unviable to operate ATMs and might lead to the closure of half of the total 2.38 lakh machines in the country. "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 scheme, who withdraw cash from ATMs, may find their neighbourhood ATMs shut. This may result in long queues and chaos similar to what the country witnessed when ATMs were not dispensing cash post demonetisation," the industry body said.

The bank is one of the largest ATM service providers with over 9,428 ATMs on the pan-India basis. Despite assurances about not increasing the ATM usage charges, it has not said anything about bearing the additional compliance requirements that call for a huge cost outlay. The ATM industry rues low ATM interchange and ever-increasing maintenance costs. The ATM service providers need around Rs 3,500 crore to fully comply with the new RBI and Centre's guidelines on the management of the ATMs. "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 when no such requirements were in sight," said CATMi.

Meanwhile, PNB has said it fully agrees with the RBI guidelines on the security of ATMs and has already started the upgradation process. "The security measures advised by the RBI are in the interest of the bank and the customers at large and PNB has already started the process of implementation of the security measures on its ATMs," it said.