ATM withdrawal charges hike soon: ATM cash logistics firms are seek higher ATM replenishment charges from banks amid rising operational costs.
Cash logistics companies have written to Indian Banks' Association citing concerns. Back-to-back hikes in fuel prices and workers' wages have led to an increase of up to 20 per cent in the operating costs for cash logistics players, triggering the demand for a higher payment for managing cash at bank ATMs.
ATM Replenishment means the process of refilling an Automated Teller Machine (ATM) with cash (and sometimes other items like receipt paper or ink).
- Cash logistics industry estimates overall operating costs may rise by 15-20%
- CMS Info Systems, Brink's India and SIS Prosegur among firms seeking revision in ATM cash loading charges
- Higher ATM replenishment frequency due to demand-supply gaps adding to logistics expenses
Cash logistics industry body CCA (Currency Cycle Association) has written to the Indian Banks Association (IBA) seeking a "pricing realignment".
CCA, in a statement, said it has highlighted the "rising operational cost in the cash logistics sector and has flagged a sharp rise in operating costs that will require timely pricing realignment with banks".
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In the letter addressed to banks, a copy of which was reviewed by PTI, CCA said that fuel prices "have increased and continue elevating", which impacts the cash van movement expenses, while simultaneously, there have been upward revision in minimum wages across several key states.
CCA said in its statement that Haryana has increased minimum wages for unskilled workers by approximately 35 per cent to Rs 15,220 per month, while Uttar Pradesh has hiked it by around 20 per cent to Rs 13,690.
Besides, there has also been an increase in statutory expenditures, including those on insurance, technology and compliance, it said.
"Efficiency measures like demand-led replenishment will help, but they cannot offset cost increases of this scale. Further absorption is no longer sustainable, and a timely pricing realignment with our banking partners is now necessary," CCA's secretary general U S Paliwal said.
Alluding to Prime Minister Narendra Modi's call for austerity, the industry body said it is undertaking operational efficiency measures like demand-led automated teller machine (ATM) replenishment and route optimisation without compromising ATM uptime and cash availability.
Impact on Customers
If banks agree to the higher charges, the cost of operating ATMs will increase for the banks. However, this is necessary to ensure reliable and timely cash replenishment services. Without a reasonable hike, these companies may be forced to reduce service quality or frequency, which could lead to more ATMs running out of cash, something that affects customers directly.
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