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Friday, 11 November 2016

Largest amount of cash ever will be in transit simultaneously





Shailesh Menon
MUMBAI: It may sound surreal, but close to 12,000 heavily guarded cash vans would be on the road over the next few days, ferrying close to 202 crore Rs 100 notes to ATMs nestled in the nooks and corners of the country.
On their return trips, these cash vans would be stuffed with over 1,300 crore Rs 500 and Rs 1,000 notes (amounting to roughly Rs 8,50,000 crore), demonetised by the government. This could probably be the largest sum of money to ever hit Indian roads at the same time.
“It’s a mammoth task at hand and we all have our war-rooms ready,” said Navroze Dastur, managing director of NCR Corporation, which services nearly half the 2.25 lakh ATMs installed in the country. “The banks, cash-in-transit operators and ATM service providers like us are all working towards making this transition to newer currency notes seamless. That said, it may take a few days before we get things on track,” Dastur said.
The biggest challenge for ATM operators would be to empty the current lot of Rs 500 and Rs 1,000 notes. The demonetised notes will have to be reconciled by respective banks before further action, which most probably could be the “irrevocable destruction” of both the series.
As and when the demonetised notes are removed, banks, cash in transit operators (Writers, SIS Prosegeur, Brinks Arya and the likes) and ATM service providers like NCR and Hitachi Payment Services may simultaneously load up Rs 100 notes (and also new Rs 500 and Rs 2,000 notes, if made available by that time).
“We may be able to make the transition seamless if we get adequate supply of Rs 100 notes and also the new denominations on time. A well co-ordinated effort is underway to regularise ATM operations as soon as possible,” said Loney Antony, managing director of Hitachi Payment Services.
But the whole cash logistics operation — covering ATMs installed at far-flung places and thousands of currency chests across the country — is not as easy as it seems. Firstly, all the ATM “cassettes” have to be manually configured to hold the incoming Rs 100 notes and also the new notes to be issued in Rs 500 and Rs 2,000 denominations. Cassettes are “boxes” fitted inside the ATM to dispense cash to customers.
Most ATMs in India have four separate cassettes to hold different denominations of cash — their configurations vary as per the currency they hold. Till now, most ATMs held two cassettes for Rs 100 notes and one each for Rs 500 and Rs 1,000 notes. “Now, this configuration will have to be changed manually… so we’ll have to send technicians to all the ATMs in the country to make the desired change,” Dastur said.
Even when all the ATMs are configured and filled up with Rs 100 notes (only Rs 100 notes will be available till RBI releases new Rs 500-and Rs 2,000 notes), customers may not have successful withdrawals all the time.
This is because most ATM cassettes can hold only up to 2,250 notes at a time; four cassettes (in an ATM) of Rs 100 notes would mean most ATMs would have just about Rs 9 lakh to dispense when they are fully filled up.
“This may not be sufficient in places like Bandra or Colaba (in Mumbai) or Saket or Greater Kailash (in Delhi), where the ‘average withdrawals’ could be as high as Rs 10,000 per customer,” said an employee of a cash-in-transit firm on condition of anonymity. This is one reason why the government has put a temporary cap of Rs 4,000 for ATM withdrawals per day in the new currency regime.
In such cases, banks will have to refill ATMs twice or thrice every day. This may increase the ATM costs of most banks in the near term, experts say.
ATM services may turn normal only when the RBI releases new batches of Rs 500 and Rs 2,000 notes. Here again, the ATM cassettes will have to be reconfigured to accept new notes.
ATM services may turn normal only when the RBI releases new batches of 500-Re and 2000-Re denominations. Here again, the ATM cassettes will have to be reconfigured to accept new notes.
“That again is going to be a laborious task as we don’t know the height and thickness of new notes till now,” complained an ATM service provider.
On the cash logistics side, cash-in- transit firms will have to lease out more armoured vans to carry the new notes. They will also have to hire more armed guards and loading personnel to meet the deadline.

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