With the number of banks going for a hike in withdrawal limits of their debit cards increasing, the cost of refilling the ATM machines with adequate cash has also increased.
Recently, HDFC Bank had hiked the withdrawal limits of its debit cards. Loney Antony, MD of payment services company Prizm Payments, says, “On transactions at other bank ATMs, there is a limit of Rs 10,000 per transaction and only five such transactions are allowed in a month. So banks have to meet the higher limit for only their own customers at their own ATMs. If people withdraw more money then cash requirements may go up.”
Jaivinder Gill, MD of NCR Corporation India, says, “We foresee the withdrawal limit hike to have a positive impact on the number of high-value transactions at ATMs, since customers now don’t need to restrict their large transactions to banking hours.”
Ramesh Mengawade, CEO, Opus Software and ElectraCard Services says, “The frequency of replenishing cash per week will increase. This would mean additional costs (for vendors refilling cash and in turn banks) as instead of five trips, he (the vendor refilling cash) may have to make six trips in a week to the ATM to refill cash.”
But the rate of cash refill depends on the site of the ATM.
An official of a replenishing firm says, “Banks do not want to keep more money in ATMs as it is idle cash and increases their cost of funds. Depending on the dispensing pattern, the frequency of refilling cash will have to be increased. Banks will have to pay more charges, which could be around Rs 300-500 per day (per additional visit for each ATM)”.