BUSINESS

This ATM Co. Serving Rural India Hasn't Seen Cash In Over A Week, Has No Idea When Currency Will Arrive

Acute cash crunch.

17/11/2016 10:37 AM IST | Updated 17/11/2016 12:16 PM IST
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DIPTENDU DUTTA/AFP/Getty Images
Indian village customers form queues outside banks to deposit and exchange old denomination Indian Rupee 500 and 1000 currency notes for new ones, in Bhutkirhut Village on the outskirts of Siliguri on November 15, 2016. Long queues formed outside banks in India since the government's shock decision to withdraw the two largest denomination notes from circulation creating havoc problems mainly in rural areas where the lack of availibilty of ATM and banks. Villagers who work mostly by daily wage basis use to reach the bank after walking miles in early morning to exchange their old notes. / AFP / DIPTENDU DUTTA

If you thought automated teller machines (ATMs) were running dry only in the big cities following the demonetisation move, the situation in rural India is far, far worse.

BTI Payments, a 'white label' ATM company that provides ATMs in remote, rural parts of India hasn't received any currency since the move was announced, and hasn't been given any word on when it can receive the new currency to become operational, K Srinivas, MD and CEO, BTI Payments, told HuffPost India.

BTI Payments, which is India's second largest white label ATM company by network, operates about 4,200 ATMs all over India across 10 to 11 states with about 90 per cent of the machines located in small villages where traditional banks can't reach. Before demonetisation, the company would refill about Rs 80 crores in cash in its machines daily.

But with no new cash, its machines are shut.

"The biggest challenge is the availability of currency notes," said Srinivas. "We have to get currency notes from banks ...we are waiting for banks to disburse the new currency."

BTI Payments relies on about 11 retail banks – both public and private – for its cash needs but the banks are yet to inform the company when it can expect new currency to arrive.

"Banks are dealing with their own issues and struggling," he said. "We are hoping that banks would be a in a position soon to give us the currency or if the Reserve Bank could allow us to withdraw cash directly from the currency chests of RBI to get things moving."

BTI Payments, like other major ATMs, also has to recalibrate its ATMs to become compatible with the new currency notes, a process that could take another 10-12 days, said Srinivas.

India is estimated to have about 13,000 such private white label ATMs that are not affiliated to any bank and are likely facing similar issues, according to Srinivas.

India's rural economy has been severely hit following the government's decision to scrap Rs 500 and Rs 1,000 currency notes abruptly last week.

As for BTI Payments, despite an RBI license for it to operate a fleet of up to 9,000 ATMs, its expansion plans have been put on hold because of the current currency crunch.

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