The number of people in India withdrawing money from the Automated Teller Machines (ATMs) has plunged since Prime Minister Narendra Modi's demonetisation drive pushed the economy to go cashless.
There has been a cash crunch at ATMs following the government's decision to scrap Rs 500 and Rs 1,000 notes in circulation at the time in November last year.
The surprise move led to a surge in card transactions at point-of-sale (PoS) terminals. People also started making more digital payments directly through their cards rather than going to ATMs and withdrawing cash.
"A lot of people have been talking about ATMs, but the fact is — as we move towards digital, we are examining ATM transactions for the banking system and even for us, (we see it) going down," Aditya Puri, chief executive of HDFC Bank, was quoted as saying in an Economic Times report.
The number of ATMs doubled between 2012 and 2015, but is now seen stagnating at around 2 lakh and have merely shown any growth in the last six months. Debit card transactions on ATMs fell to an average of 66 crore a month from over 75 crore before demonetisation.
"Customers are doing more and more transactions digitally," said Rajiv Anand, executive director at Axis Bank.
"An interesting statistic for us is that the value of transactions that we are doing on our mobile phones is now more than the value of transactions we are doing on the ATMs," he added.
The value of mobile banking transactions jumped 46 percent to Rs 49,029 crore in December 2016, a month after demonetisation, according to Reserve Bank of India data.
In the last financial year of 2016-17, there were a total of 865.9 crore digital transactions across all banking platforms. That was a significant rise from the 2013-14 number of 254.5 crore digital transactions. Within a period of three years, the amount of digital transactions has more than tripled.
ATM may soon be a thing of the past if banks fail to come up with strategies to push for more demand. However, with the growing efforts — both by the government and the banking sector — to push for more digitisation, that growth for ATMs seems unlikely.
