The Confederation of ATM Industry (CATMi), the operator of teller machines in India, has stated that nearly half of the total ATMs in the country may shut down by March 2019.

CATMi said that the recent regulatory changes have increased the operational cost, making it commercially unviable to operate the ATMs.

The ATM closures, if they happen, will significantly impact regular businesses and may cost thousands of jobs.

Additionally, it will also affect the financial inclusion efforts initiated by the Indian government as most of the ATMs, which may drop its shutters, are located in rural and non-urban regions.

ATM Closures:

In the last one year, the Reserve bank of India (RBI) issued a series of regulations to upgrade and secure the ATMs.

It includes mandate that all cash vans should be accompanied by armoured guards and replenishment of exhausted ATMs with cassette swaps. The exiting process involves refilling the cassettes with fresh cash. It will be carried out in stages and is scheduled to be completed by April 2021.

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To beef up security levels against potential cyber-attacks, RBI issued another circular to upgrade the software in ATMs in June. The upgrade is required to be completed by June 2019.

CATMi cited that implementation of new guidelines will involve a cost of more than INR35bn (about $495m), an amount which the association and banks are not ready to pay.

CATMi director K Srinivas in an interview to BloombergQuint said: “There have been a couple of guidelines that have come from the RBI and Ministry of Home Affairs regarding physical security of cash operations and cyber security measures.

“All this costs money and operators who need to make all these changes need to be compensated.”