Costly affair? Banks reluctant to dispense ₹200 notes via ATMS

NEWDELHI: Banks are reluctant to dispense the new ₹200 currency notes through ATMS as it would disrupt the system once again while increasing costs. The Reserve Bank of India (RBI) has printed limited number of ₹200 currency notes in the first phase and will take a call on whether or not to ask banks to recalibrate the ATMS based on the feedback it gets in the first few months, banking sources said.

Calibrating an ATM costs about ₹1,500. However, the exercise could take a few months to complete and there is fear of a disruption once again. There are about 220,000 ATMS in the country. Banks, especially public sector lenders have been reeling under pressure from rising non performing assets (NPA) and thinning profit margins.

“During the demonetization period, banks have already done this exercise and it was not easy..during that period most other banking activities came to a halt and this cannot be undertaken again in a such a short span of time,” said a senior official at a large public sector bank, who did not wish to be identified.

The cash logistics companies said that they have got no directive from banks on recalibration.

An ATM has four cassettes or boxes which hold cash. Before demonetisation, two of these cassettes held ₹500 currency notes and the other two held ₹100 and ₹1,000. After the recalibration exercise, two of the cassettes hold the new ₹500 currency notes while the other two hold ₹100 and ₹2,000.

NSG Rao, secretary of Cash Logistics Association, said that typically ATMS have no additional space for another cassette. “In case ₹200 currency notes have to be dispensed through ATMS, then once again one of the four cassettes will have to be tuned to carry these new notes,” he said, adding that banks have not given them any direction on recalibration.

The government introduced the ₹200 notes to help people change their high value currency notes.