This is why filling up ATMs has become a challenge for banks

Common public waiting outside an ATM to open

Chennai: Filling around 200,000 automated teller machines with the new Rs 500 and Rs 2,000 currency notes nationwide is a mammoth task for the companies offering such services.

That`s because the machines have to be reconfigured to dispense the new notes while retaining the ability to dispense old ones, such as Rs 100 and Rs 50.

The challenge is even greater for "white label" ATM operators (not attached to any banks) as they would have to get cash in these difficult times. Such operators maintain around 13,000 ATMs across the country.

"It is a massive and challenging exercise. First we had to evacuate the Rs 500/Rs 1,000-rupee notes from the ATMs and then fill them with lower denominations at regular intervals as the machines get empty soon owing to the demand as well as the lower value," V. Balasubramanian, President of white label ATM operator, Financial Software and Systems (FSS), told IANS.

The government declared on November 8 that the two higher denomination notes would no longer be legal tender and new notes with value of Rs 500 and Rs 2,000 were being issued. Although the banks have been giving customers Rs 2,000 notes since Friday, the ATMs are yet to start dispensing them. The new Rs 500 notes are yet to be issued by the Reserve Bank of India.

Balasubramanian said some ATMs will start offering Rs 2,000 notes on Sunday or Monday. FSS is the largest provider of ATM portfolio management for Indian banks, handling around 40,000 ATMs for over 30 public and private sector banks.

Talking about the complexity of the operations, he said that on a normal day the ATM back-end operations would be run with around 200 persons. But with enhanced requirements now, he would need about 1,000 persons.

"Further, the vans have to make multiple trips to refill the ATMs as they get empty soon because of the lower denominations of Rs 100 being offered now," he said, adding that the value of each refill was around Rs 500,000.

He said with the advent of new notes, the machines need to be configured at the field level, although some configuration for existing notes can be carried out at the central level. The persons loading the machines would be doing the reconfiguring.

According to K. Srinivas, Managing Director and CEO of BTI Payments Pvt Ltd, the challenge of reconfiguring and refilling the machines in rural areas was even more acute.

"The first step we took was to shut down all our ATMs immediately on hearing of the government`s decision. We worked with our cash management companies to empty out the ATMs," Srinivas said. He did not want to say how much money was retrieved.

BTI Payments operates around 4,200 ATMs in the country.

He agreed it was difficult to get enough number of 100 rupee notes from the banks to fill up his company`s ATMs as the banks themselves have to fill up their own machines.

"We have written to RBI to supply cash and are yet to hear from them," Srinivas said.

Agreeing that digital transactions will increase, Srinivas said that there are already demands for more ATMs. "The business of white label ATM operators is also set to grow," he said.