by admin | May 25, 2021 | Banking, Corporate, Corporate Governance, Economy, News, Politics
By Quaid Najmi,
Mumbai : The Reserve Bank of India’s (RBI) announcement launching a new series of 100-rupee denomination notes has been greeted with trepidation by the major companies engaged in the manufacture and supply of Automatic Teller Machines (ATMs) in the country.
Like the new post-demonetisation Rs 2,000, Rs 500, Rs 200 and the new Rs 50 notes and Rs 10 notes, even the new lavender-coloured Rs 100 is a tad smaller in size compared to the blue-coloured Rs 100 notes currently in circulation.
While the existing Rs 100 notes are sized 157×73 mm, the new ones measure 142x66mm, as per the RBI announcement this week.
“This means that all the 237,000 ATMs in the country would again have to be re-calibrated to dispense the new Rs 100 notes. This entails a massive effort which is both time-consuming and adds to our costs,” Confederation of ATM Industry (CATMi) Director V. Balasubramanian told IANS.
For recalibrating all the ATMs in the country to enable them dispense the new Rs 100 notes, the operators need the concerned bank’s official Cash Agency and an engineer of the machine manufacturer together.
“Though the actual recalibration may take barely 20 minutes per ATM, there are huge logistical issues involved in getting the Cash Agency person and engineer together all the time. Even then, with best efforts they can recalibrate barely 15-20 ATMs per day depending on the banks’ cooperation. So, this will be a huge time-consuming and high-cost exercise at a national level,” Balasubramanian rued.
Hitachi Payment Services Managing Director Loney Antony estimates that the entire recalibration process could cost over Rs 1 billion (Rs 100 crore) and take a minimum of one year to complete.
“In fact, the recalibration of the new Rs 200 notes introduced last year is still not completed in all ATMs, so recalibration of the new Rs 100 notes could take even longer unless planned properly,” Antony cautioned.
The RBI said in its notification that initially, the new Rs 100 notes will be dispensed only through bank branches and printing and supply would gradually increase.
Antony said it is important to have sufficient supply of Rs 100 and Rs 200 notes to ensure there are enough lower denomination currency notes in circulation for all transactions.
Balasubramanian said the ATM industry is grappling with the problem of how to recalibrate the ATMs in terms of the new and old Rs 100 notes and may refrain from doing so till sufficient numbers of the new notes are available.
Euronet Services India Pvt. Ltd. Managing Director Himanshu Pujara said unless all the ATMs are recalibrated, the new notes will not be available through this channel to the people, and recalibration itself is a time-consuming and expensive process for the already struggling industry.
Balasubramanian — who is also the President of FSS Company that manufactures ATMs — said that since the old and new Rs 100 notes will co-exist till the RBI completely withdraws the old notes, “it will be difficult to recalibrate all the ATMs to support the new Rs.100 notes”.
“There is likelihood of an imbalance between the supply of the new notes and the withdrawal of the old notes, especially in the hinterland,” Balasubramanian pointed out.
In such a scenario, he thought it would be prudent to let the banks and service providers decide when to calibrate the ATMs for the new notes, depending on the “supply-withdrawal” situation of the old notes across all states over the next few quarters.
At present, as per National Payments Council of India Ltd (NPCIL), there are around 237,000 ATMs functional in the country, but to adequately cater to the entire country’s population, the need is almost three-four times more, or around a million ATMs.
Flying in the face of the government’s declarations about digitising the economy, a whopping 57 percent of all ATM transactions are only for cash withdrawals. Immediate Payment Service (IMPS) lags at 20 per cent followed by Point of Sale (PoS) 17 percent, and rest for Unified Payment Interface and mobile wallets. (Total = 100 percent, as per RBI).
Major industry players say that, barring the metros and urban centres, people in states like Uttar Pradesh, Maharashtra, Bihar, West Bengal, Madhya Pradesh and others have to travel 40 km or more to access an ATM.
“Moreover, as per official data, barely 30 per cent of bank account holders in the country regularly use their ATM cards… the others prefer cash transactions. There are problems of infrastructure and connectivity which hamper growth of ATMs network,” Balasubramanian pointed out.
India has among the lowest ATM penetration globally, averaging 8.9 ATMs per 100,000 population, compared to Brazil’s 119.6, Thailand’s 78, South Africa’s 60 and Malaysia’s 56.4.
Incidentally, China currently has around a staggering one million ATMs, which will touch 1.5 million by 2020.
(Qqaid Najmi can be contacted at q.najmi@ians.in)
—IANS
by admin | May 25, 2021 | Banking, Corporate, Corporate Reports, News, Politics
Mumbai : Cash withdrawals from ATMs actually declined in the January-March quarter of last financial year on the sequential basis, implying the current shortage could be “superficial”, a report from State Bank of India said on Thursday.
“Coming to withdrawals, the Q-o-Q (quarter to quarter) ATM cash withdrawal trend indicates that there has been a continuous increase in withdrawal in first, second and third quarter of 2017-18 (though increased in second half).
“Interestingly, in Q4 (fourth quarter) of FY2018, there was a sequential decline, that has been also the case in some of the earlier years. Thus the decline in ATM withdrawal in Q4 could actually be a seasonal phenomenon apart from the usual reasons floating around like currency shortage. This strongly supports our contention that the current shortage could be superficial rather than real,” the report said.
However, the sudden surge in currency in circulation (CIC) was “perplexing”.
The quarterly growth in Q4 FY18 shows that from the average growth of 4.4 per cent of 5 years from FY12- FY16, the growth has shot up to 8 per cent.
“This is despite the fact that economy had achieved remonetisation and digital modes have also gained traction in a big way. On a monthly basis, incremental pace in currency in circulation is three times higher in first quarter 2018, compared with first quarter of the five previous years (FY12-16). Hence there is indeed some unusual trends in 2018,” the report said.
During April in previous years too, the currency in circulation had seen spikes, and the expansion in April 2018 till date was as usual.
The average increase was 0.43 lakh crore for FY12-16. This year by mid-April this number has risen to 0.44 lakh crore.
“However, the catch is this can go up even further if the hoarded 2000 notes are not back into circulation as RBI will have to print more notes to fix this artificial shortage,” the report added.
—IANS
by admin | May 25, 2021 | Banking, Economy, Markets, News
Mumbai : Bank customers may be hit as ATM operators have demanded higher “interchange rates” for ATM transactions to enable them to comply with recent stringent RBI guidelines, an industry body said here on Wednesday.
Presently, all banks charge a fee of Rs 15 for each cash and Rs 5 for all non-cash transactions from each other for use of their ATMs by other banks’ customers — which is recovered from the (user) customers — beyond the five minimum free transactions.
Now, the Confederation of ATM Industry (CATMi) has demanded that this should go up by at least Rs 3-5 per transaction to enable the (ATM) operators to recover their costs which have skyrocketed in recent times.
CATMi Director K. Srinivas said that recently the RBI has issued guidelines that will result in overall cost hike for the ATM service providers.
Among these, the RBI said banks must implement certain minimum standards in their arrangements with the service providers for cash management-related activities by July.
These include a minimum fleet size of 300 specifically fabricated cash vans (vehicles), a driver, two custodians and at least two gunmen for security, each vehicle must be GPS-enabled and monitored live with geo-fencing mapping with additional indication of the nearest police station during any emergency.
Besides, the RBI stipulates that ATM operations should be performed only by certified personnel who have completed minimum hours of classroom learning and training among others.
“These can substantially increase the costs of operations for all the 19 CATMi members, and banks will have to pay for the costs of the increased compliance. Where there is a pay-per-use model, the issuer bank pays the increased per transaction fee for its cardholders transacting on other banks ATMs,” CATMi spokesperson V. Balasubramanian told IANS.
Another RBI circular that has created concerns pertains to banks considering using lockable cassettes in the ATMs which would be swapped at the time of cash replenishment in order to reduce risks involved in existing method of open cash replenishment or top-up.
“There are more than 230,000 ATMs operational all over India, each with four cassettes to store the cash in denominations of Rs 2,000, Rs 500, Rs 100 and Rs 50. The swap of cassettes would entail a massive investment by the ATM service providers, as additional cassettes must be available for all ATMs instead of using the same cassette,” Balasubramanian said.
However, for this, the RBI has given time up to March 31, 2021, covering one-third of the ATMs each year till then, he added.
Though Srinivas welcomed the RBI guidelines, he urged the apex bank and the National Payments Council of India to immediately increase the interchange rates in order to make this viable for the ATM services industry.
“We are already burdened with higher costs of Euro Master Visa protocol and Biometrics implementation. Now, the added costs of cash management will make the operations unviable for Bank ATM operators and White Label ATM operators, and will force closure of several ATMs.”
Another CATMi Director Himanshu Pujara said that an interchange rate below the cost of servicing each transaction would mean that expansion of ATMs to the semi-urban or rural areas could suffer.
“CATMi is in discussions with the RBI and the NPCI and hopes that a decision to increase the interchange rate is taken up on priority,” he said.
Presently, through the 230,000 ATMs, an average minimum of one million transactions of varying cash amounts take place daily, worth several thousands of crores of rupees.
—IANS
by admin | May 25, 2021 | Corporate, Corporate Reports, Markets, Networking, Technology
Bengaluru : ATM malware has evolved from requiring physical access to infect the machines to now successfully attacking network-based access using the bank’s corporate network, a new report said on Tuesday.
Global cyber security solutions leader Trend Micro and Europol’s European Cybercrime Centre (EC3) released a comprehensive report titled “Cashing in on ATM Malware”, that details both physical and network-based malware attacks on ATMs as well as highlights where the malware is created.
The report dissects recent attacks using bank networks to both steal money and credit card data from ATM machines, regardless of network segmentation.
“The malware being used has evolved significantly and the scope and scale of the attacks have grown proportionately. While industry and law enforcement cooperation has developed strongly, the crime continues to thrive due to the major financial rewards available to the organised crime groups involved,” said Steven Wilson, Head of EC3.
These attacks not only risk personally identifiable information (PII) and large sums of money, but also put banks in violation of PCI-compliance standards.
“Protecting against today’s cyber threats and meeting compliance standards require increased resources that are not always available for organisations, including those in the financial services industry,” added Max Cheng, Chief Information Officer for Trend Micro.
Public-Private Partnership strengthen the global, ongoing fight against cybercrime, and help fill the resource gap for organisations.
“A well-designed security plan can go a long way towards ensuring that an ATM installation can become very difficult to exploit and victimise,” said Nilesh Jain, Country Manager-(India and SAARC), Trend Micro.
—IANS
by admin | May 25, 2021 | Banking, Corporate, Corporate finance, Corporate Governance, News
By Meghna Mittal,
New Delhi : While the RBI launched the 200-rupee note a week ago, it may take up to three months for ATMs to start dispensing the new denomination currency as it will involve a huge exercise of recalibration.
Some banks have even asked the ATM companies to begin testing the new note for recalibration of the machines, though they have not got supplies of the new currency. Only last year, the banks were involved in recalibration of ATM machines after the demonetisation of high-value currency notes in November.
Reserve Bank of India (RBI) did issue a statement saying that the supply of the new Rs 200 notes would soon be ramped up, but has not given any time-frame by which it will be available in adequate numbers.
ATM manufacturing companies said that they have not received any directive from the RBI regarding the recalibration of ATMs for the new Rs 200 note. They disclosed that some banks have at an informal level have asked them to start testing of the new note, since it is of a different size.
It is yet to be seen whether all the 2.25 lakh ATM machines across India would be recalibrated for dispensing the new note.
Ravi B Goyal, Chairman and Managing Director, AGS Transact Technologies Limited, which claims to have an installed base of 60,000 ATMs, told IANS, “The process of recalibration will begin once we receive the directive from the RBI. The size of the new notes is different from the existing ones and so, once we receive the new notes, we will have to understand its dimensions and accordingly reconfigure the ATM cassettes. Next, we will have to check if the supply of notes is good enough to run the cassettes at full capacity.”
“The entire process of recalibration can be completed within 90 days without affecting the regular functionality of ATMs to a large extent. In fact, the ATMs will continue to be fully operational during recalibration and will continue to supply Rs 100, Rs 500 and Rs 2,000 denominations,” he said.
Among the other companies operating in the sector are NCR Corporation, which has over 1,08,000 machines, and BTI Payments, which has 4,500 cash dispensers.
NCR Corporation said that while some banks have reached out to them to start testing of the new note, they were yet to receive the supply to begin the process.
“Banks have started getting in touch with us for testing the same. They will let us know which machines they wish to configure for Rs 200, which will require physical visits to ATMs. However, the new notes are still to be provided to us by the respective banks so that the testing can begin,” Anand Garollu, General Manager (Services), NCR Corporation said.
K. Srinivas, Managing Director and CEO of BTI Payments, an RBI-licensed firm that operates cash dispensers not owned and managed by banks, said, “Recalibration will begin as and when we receive adequate quantity of Rs 200 notes. We are looking to roll this out as quickly as possible.”
He said that the industry was expecting Rs 200 notes to be available over a period of time across various geographies.
“The recalibration can be done progressively as and when the new denomination note starts to become available. Unlike the last time around (during demonetisation), when we had to recalibrate all machines in one go,” Srinivas added.
The ATM companies said that they were expecting to receive official communication on recalibration of ATMs soon. However, e-mails to RBI in this regard did not elicit any reply, they said.
“The production of these (Rs 200) notes is being ramped up by the currency printing presses and over time, as more notes are printed, it will be distributed across the country through the banking channels and will be available for public in adequate quantity,” the RBI had said in a statement.
Currently, Rs 200 notes are available only through select RBI offices and some banks.
While State Bank of India and Punjab National Bank are reported to have received the new Rs 200 notes, Eknath Baliga, Manger, KYC-Antimoney Laundering Cell, Corporation Bank, Mangalore, told IANS that none of its branches across the country had received the Rs 200 notes so far.
The Rs 200 note is currently being printed only by RBI presses. Security Printing and Minting Corporation of India (SPMCIL) sources told IANS that the company has not received any indent so far for the printing of Rs 200 notes. India’s two currency presses are owned by RBI and two by SPMCIL, which is a government-owned company.
How the ATM recalibration happens:
Usually, an ATM holds four cassettes — three of which can continue to be used for Rs 100, Rs 500, Rs 2,000, and the fourth cassette can be used for the new Rs 200 notes. On an average, each cassette has a capacity to hold 2,000-2,500 notes depending upon the quality of cash issued by banks. However, there are many ATMs that only have either two or three cassettes.
The number of slots in the ATM can be configured as per the bank’s preference. The banks decide which denomination needs to be configured in a machine on the basis of the customer profile in the area where the ATM is located and the number of transactions on that machine.
The banks need to make requisite changes at their ATM switch before the roll-out of the physical recalibration at the ATMs in the field.
The recalibration of a new denomination takes 30-45 minutes per ATM. The process of recalibration is not very difficult but is time-consuming given an engineer has to visit every ATM and configure it to dispense the requisite denomination.
The introduction of the Rs 200 note has been welcomed as it would ease the currency circulation in the market as people prefer lower denomination cash withdrawals from ATMs. Rs 200 would also be more convenient for rural consumers.
(Meghna Mittal can be reached at meghna.m@ians.in)
—IANS
