The volume of withdrawals from ATMs in July hovered close to their March levels, when all restrictions on cash withdrawals imposed during demonetisation were removed. According to data released by the Reserve Bank of India (RBI), the number of ATM transactions in July stood at 704 million, with the corresponding figure for March being 710 million. The value of transactions in July – at Rs 2.27 lakh crore – was marginally higher than the Rs 2.26 lakh crore of transactions clocked in March. While most ATMs are enabled with a facility to transfer funds, the feature is barely used and most transactions at ATMs involve cash withdrawals. ATM transaction volumes between April and June remained in the range of 656-668 million. Transaction values also slipped from their March levels to move in the range of Rs 2.16-2.26 lakh crore during April-June.
Industry players pointed out that there is an inverse relationship between the value of transactions at ATMs and those at point-of-sale (PoS) machines; in other words, when the value of ATM transactions rises, that of PoS transactions falls and vice-versa. The value of credit and debit card transactions at PoS machines was in the range of Rs 70,000-74,000 crore, up from Rs 69,089 crore in March. The figure slipped to Rs 68,498 crore in July. Neeraj Vyas, deputy managing director and chief operating officer, State Bank of India (SBI), said the bank had not experienced much of a fluctuation between March and July. “Withdrawals may have risen after March as people were still worried about ATMs running out of cash,” he said. “As cash came back into the system, people withdrew less because they were not bothered about ATMs running dry.”
Radha Rama Dorai, managing director for ATM business at FIS Payment Solutions & Services India, said that the high volume of withdrawals in March was a result of people trying to avoid receiving high-value currency notes. “The availability of Rs 500 notes prior to March was a problem. So customers were used to doing multiple transactions to avoid getting Rs 2,000 notes from ATMs and that’s why the number of transactions in March was high,” she said.
Vyas said withdrawals are likely to rise in subsequent months as people spend more during the festive season.