Mobile Apps For Banking As India Cracks Down On ATMs
It has been evident in the past two years that bank ATM installation companies are finding it hard to meet the standards of security set by the central bank in India, thus reducing their ability to keep their automated teller machines active. The software and upgrades for equipment required by the central bank has proven too costly, leading to a lot of ATMs shutting down. India has now been placed in the lowest of BRICS countries in terms of ATMs per 100,000, as shown by the numbers revealed by the International Monetary Fund (IMF).
In spite of the lack of ATMs in the country however, the past two years has seen an increase in transactions for the teller machines, said the Reserve Bank of India (RBI). These figures have given rise to the problems most banks and third parties now have when setting up their own ATMs.
The chief executive officer of the Indian Overseas Bank, R Subramaniakumar, has stated that increasing the cost for security through software and equipment updates will give banks, bank ATM installation companies, and other operators the reason and means to charge the public more for using their services. She adds that, because of this, not everyone sees it as a solution.
Access to ATMs has become increasingly important for the Indian population since November 2016, when Prime Minister Narendra Modi made certain banknotes illegal, leading around 335 million people to opening bank accounts and inserting them in the banking system.
Another factor in the decline of ATMs can be attributed to branch rationalisation. Around 1,000 outlets have been cut by the State Bank of India after it acquired a local lender and five other associate banks. Dinesh Kumar Khara, one of SBI’s managing directors, states that digitisation will make banks less reliant on branches, as one in two ATMs are located in branches.
This decline in the number of ATMs is predicted to give rise to mobile banking, as India as the largest growing Generation Z population. In the last five years alone, the transactions done over mobile banking has increased 65 times. Federal Bank Ltd’s chief financial officer, AshutoshKhajuria, has said that people are switching more to mobile apps for their banking.
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