Monday, January 23, 2012


Have you ever thought of the common sense in which our banks have been forced by the top policy makers to spend millions or perhaps billions of rupees in installing and maintaining ATM machines across the nook and corner of the country?

If you observe carefully, you can see that these machines are not installed for the convenience of the common people at all.

One can see that these machines are installed by the banks concerned as if for the sake of installing those and making those higher authorities satisfied on the numbers and targets. 

Otherwise how will you explain the location of most of these machines? Most of these machines in India are located in such places and locations where there is no approach, parking space or are in isolated places where cash transactions are absolutely unsafe. You hardly find any ATM machines in commercial market places where one needs the cash!

Again a good number of machines are not maintained well or do not have the connectivity or the cash. If that was the case then why did they spend the money to install it? Was it for the commission that the ATM machine vendors were offering?

Now coming to the currency those working machines are distributing. You hardly find any ATM machines in India distributing cash of lower denominations of Rs 5, 10, 20 or 50.

If you request Rs1000, the machine will most likely give you a 500 rupee note and 5 hundred rupee notes. Getting two 500 rupee notes or one 1000 rupee note is also quite possible.

If you want to make those grocery and small payments for which cash is essential, ATM is of no use. But incidentally, the change that you need from the grocer is available with him. From where does the shop keeper get his small denomination notes, if it is never distributed by the ATMs?

Some years ago, the government of India made a rule that all payments above say Rs20,000/- to any one has to be made by cheque or similar instruments and not in hard cash. But no one ever follows this rule, making circulation of unaccounted cash a reality.

Why do the banks refuse to enter all the details of the cheques in their ledgers? Why cann’t the reserve bank or the government insist on this, making the banks do this without fail? Those insisting for cash payments take shelter on this simple excuse that payments made through cheques are difficult to be accounted. Is it really so? So, most of our educational institutions insist that the lakhs of rupees that they demand from the students as fees to be paid in cash rather than in cheques. No one really wants a trace or link in their huge transactions of money. They all want it in hard cash, without the possibility of any records anywhere.

So from where these large amounts of cash come from? Obviously, it is through the ATMs.

If the government is serious of ending corruption and also inflation on account of large cash black-money circulation in the economy, they only have to do a few simple things:

First, ensure that the ATMs give out only smaller denomination cash that too not more than say rupees 5000 at a time and not more than 20,000 in a month.

Second, ensure that all transactions of amounts greater that Rs 20000 for whatsoever reason for whoever concerned are either through cheque, draft  or through any of the electronic transfer means.

Those who need cash in huge quantities should be required to take it from the banks with proper recording of the reasons.

Higher denomination currency notes should be withdrawn from circulation. Let the wealth of the people in currency should be kept only in the bank accounts.

The cash collected by traders and businessmen should be deposited back in the banks on a daily or weekly basis.

Are these steps any difficult to implement?

If the authorities want, it could be done overnight. Just as they implement the price rise of the petroleum products!

But then, how can you expect the beneficiaries of the system work against it?


  1. This is a very helpful and informative. Good post and keep it up.

    1. I am happy that some one from the USA has found this blog useful and informative, though the blog was primarily meant for India and the Indians. Again this single liner response from eclipse-the ATM service provider company of the US should be an eye opener to those decision makers of India, if at all they ever bother to read blogs and understand the pulse of the public !

  2. This is really an informative one. I wish these kind of ATM will also be available here.

  3. Very insightful observation. We have visited a lot of small countries and seen the same conditions as you have mentioned in India. May be there should be review procedure before companies could actually finalize a location.


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