Why ATMs are running out of cash

Naina Rajat, a resident of Gurgaon, went to a nearby ATM at 11 am to withdraw cash. Rajat had to wait for over two hours for her turn to come. “I was, however, lucky as I could withdraw ₹2,000 from the ATM, but by the time I left the place, I was exhausted,” she said. Recounting her experience, Rajat said the exercise “should have been better handled.”

The country’s banks struggled through the day to cope up with serpentine queues with most ATMs going dry, no adequate replenishment and disgruntled customers, even as they extended their working hours and opened up many temporary cash counters. Sources said while banks had made arrangements to address this issue, the public sector lenders are short staffed by at least 25-30%.

Management of ATMs, on the other hand, has been outsourced. In most cases, delivery and replenishment of cash is done by cash logistics companies and not by the banks themselves. The “process of disposal” is done by

and processing machines Currency is fed into high-speed processors, which turn these notes into Why this chaos?

On a normal day, ₹10-15,000 crore is replenished in the country’s ATMs. On Friday, the rise in demand for cash was unprecedented. The 8,800 cash vans used to fill up ATMs were first used to flush out the old currency notes and only on completion of this This shredded currency is then sent off to a

area

exercise, the new currency notes could be filled up at the ATMs.

Besides, with the maximum currency notes now comprising smaller denominations—primarily of ₹ 50 and ₹100, the ATMs are getting filled while the value of cash stored in each of the machines is significantly lower.

The average transaction per ATM is estimated at about 125 in a day. But more than about 8001000 people queued up at ATMs at the metros to withdraw cash.

“The cash logistics companies are doing their best, the staff have been working 24X7 but this kind of situation has never been experienced ever, we are monitoring the situation very closely...it needs to be highlighted that the surge in demand is unprecedented,” Rituraj Sinha, president, Cash Logistics Association and co-chair, FICCI Private Security Sector Committee, told HT.

There are over 2 lakh ATMs and over 1,31,000 branches across India, of which 20,565 belong to the private lenders.

“There are complicated logistical issues involved in delivering such huge piles of cash at bank branches and ATMs across the country. It will take some time for the situation to be normal,” said a senior finance ministry official.

“To ensure that many people as possible manage to get cash, a restriction limit of ₹2,000 was kept,” the official said, referring to the withdrawal limit from ATMs.