Demonetisation: What are micro-ATMs, how they function, and how will they help ease cash crunch?

micro-ATMs are ideally meant to allow an individual to deposit or withdraw funds regardless of the bank in which their account is

Micro-ATMs: In order to ease the cash crunch situation in the country following the massive demonetisation drive, the government is banking on micro-ATMs! The Department of Economic Affairs Secretary Shaktikanta Das has said that micro-ATMs will be set up across the country to tide over the cash crunch. This would particularly help address the problems that people are facing in rural and semi-urban areas, where the ATM network is not as strong currently. micro-ATMs are Point of Sale (PoS) devices, usually easy to hold in the hand.

micro-ATMs are ideally meant to allow an individual to deposit or withdraw funds regardless of the bank in which their account is. Varying from bank to bank, the micro-ATM allows for biometric identification (via Aadhaar), use of debit and RuPay cards, or the mobile phone number, to access your bank account. The basic transaction types that are normally supported by a Micro-ATM are; deposit, withdrawal, fund transfer and balance enquiry. According to Punjab National Bank, micro-ATMs offer an online interoperable, low-cost payments platform to everyone in the country.

IDFC Bank says that its micro-ATM can offer a host of features: e-KYC based account opening, account servicing, remittances, utility payments, account servicing etc, apart from withdrawal and deposit facility. The biggest advantage of a micro-ATM is the ease with which it can be deployed, without infrastructure that a normal ATM uses. micro-ATMs can be made available with a banking correspondent in the rural areas or your local paan and kirana wala.

Prime Minister Narendra Modi on November 8 announced one of the most major reforms in Indian economy. The government has rendered all old Rs 500 and Rs 1000 notes worthless, and a massive exercise is underway to replace the legitimate currency of people with legal tender money. From November 10, long queues outside banks and ATMs are a common sight as people struggle to replace their old currency notes and withdraw legal tender money. Amidst panic and growing anger, there is insufficient cash and infrastructure back up for such a mammoth exercise, and many people, especially in the rural and semi-urban areas are being inconvenienced.

The notes that are currently legal tender money include; Rs 5, Rs 10, Rs 20, Rs 50, Rs 100, Rs 500 (new series) and Rs 2000. The government will soon come out with a new Rs 1000 note that will have enhanced security features. The massive demonetisation drive that has been announced is aimed at making existing black money in the domestic economy mussels, and also counter the threat from fake currency.