Recalibrating ATMs post demonetisation: What it tells you

As the RBI announced the old notes of Rs 500 and Rs 1000 denominations will be demonetised, it left many people without any access to valid currency, and there were restrictions on how much of the old currency they could exchange. The immediate impact of the move was that many people struggled to make everyday purchases. As the vast majority of shops, restaurants and other services in the country don’t have the capacity to accept card payments and were also refusing to accept the old discontinued notes.

Cash remains an essential part of payments because there is nothing to truly compete with the flexibility of currency notes and coins.

The demonetisation drive should be viewed as an eye-opener for the banking industry and policy makers. India is an under-penetrated market for ATMs. Let us take the situation hypothetically, had there been 4 lakh ATMs across the country, the kind of challenge that we witnessed during demonetisation might not have come. People had to queue at ATMs and the bank branches for hours to get cash and although the fact that the currency was not available is a different story.

Opening bank accounts is not enough, there should be infrastructure to transact and what better than an ATM which is available 24x7 at a far cheaper cost than opening a bank branch; especially where banking facilities are not available in villages, banks can consider opening an ATM.

Due to the top level of secrecy in this whole project, banks and ATM manufacturers were in the dark and were completely taken by surprise especially after they saw the new notes and realised that the dimensions were different which meant recalibration; this activity under normal situations would take 2-3 months. The task force that was set up under RBI deputy governor SS Mundra and wherein, all the operators were brought under one umbrella, helped in achieving the target in a short span of time. A working group was also formed under the task force, which included OEMs, cash-in-transit companies and cash management companies. This brought everybody together to complete the recalibration project.

The ATMs in metro cities were reconfigured within first ten days after demonetisation. The cassettes in each of these ATMs have been physically reconfigured to the size of these new notes. The recalibration of NCR ATMs is almost complete. The Vikhroli office was the nerve-centre from where everything was planned to complete the entire exercise. About 50,000 of the field staff and engineers panned across the country and were deployed to achieve this mammoth task.

The entire banking industry is working day and night to ensure that this entire situation has a minimalistic impact on the lives of people. They too need to cooperate with banks and other officials to make sure that the Indian economy starts running seamlessly as before.

Navroze Dastur is Managing Director, NCR Corporation