PUNE (MUMBAI):
The
Confederation of ATM Industry (CATMi), while welcoming the Reserve Bank of
India (RBI) notification dated 21st June mandating control measures for
ATMs, has proposed that the banks should bear the additional expenses on
security for all ATMs branded in bank’s name.
According to CATMi, recent compliance-related directives such
as the Cash management/logistics, Cassette Swap etc. asks for sizable
investments that may account for up to 40% of the cost of ATM machines.
The ATM industry association also made a case for White Label
ATMs (WLAs) or ATMs that are owned by private operators and not banks. It
called for an increase in the prevailing interchange rate to enable such ATM
operators make such sizable investments in future.
CATMi spokesperson and BTI Payments Pvt. Ltd CEO K Srinivas
explained, “WLAs today are on a very weak viability structure as the cost of
transactions are way higher vis-à-vis the interchange fee the operators
receive. The cost of compliance, especially for WLAs, may put the
already-stressed operators into further viability turmoil.”
“WLA operators are the only entities deploying ATMs in
underpenetrated rural areas. With this additional cost of compliance and cash
management costs, future deployments may come to a grinding halt unless
interchange is increased on a priority basis,” he added.
ATM growth in the country is already at standstill whilst the
card issuance continues aggressively powered by PMJDY and other Govt
initiatives. Banks especially PSBs are in a rapid shut-down spree on ATMs. As a
result of these, the debit card to ATM ratio has spiked; meaning there are more
ATMs needed to ensure ubiquitous coverage to these new card holders across the
country, especially in semi urban and rural areas. These investments, whilst
good for the industry as a whole, need to be funded in the form of an increase
in the interchange fee paid by the card issuers to the deployers of ATMs, else
we will continue to see a lull in expansion of the much needed ATM network
in the country,” said Lalit Sinha, Director General, CATMi.
CATMi proposed that the RBI should take all stakeholders
including banks and ATM service providers into consideration to find out the
way forward to ensure compliance to the newly announced measures.
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