Micro-ATMs on course to becoming fully interoperable

NPCI chief says financial inclusion to improve with banks installing more cash deposit machine


A grocery shop owner or daily wage earner in a village or a town will soon be able to deposit his day’s earnings with a business correspondent (feet-on-street banker) without having to fret about whether the latter belongs to his bank or to a different bank.

With the government mandating that all micro ATMs should become interoperable by this month-end, the possibility of, say, a Punjab National Bank customer depositing cash with a State Bank’s Business Correspondent (BC) and getting instant credit to his account is closer to reality.

Micro ATMs are the handheld devices carried by business correspondents for enabling balance enquiry, cash deposit/withdrawal, and remittance.

According to Abhaya Prasad Hota, MD and CEO, National Payments Corporation of India, as a part of the government’s financial inclusion drive, it is important to make micro-ATMs with business correspondents interoperable. “These were already interoperable for the last year-and-a-half. But the numbers were very few,” he said.

Currently, there are about 1.26 lakh micro-ATMs in the market. And according to the latest data, which NPCI got from banks, 1.08 lakh micro-ATMs are active. Of these, about 80,000 micro-ATMs are interoperable.

“As banks appoint more and more BCs, the number of micro-ATMs will go up….This is a process,” said Hota. Unlike an ATM, the cash-in/cash-out functions of the micro-ATM (or point of transaction terminal) are performed by the BC. The micro-ATM allows the BC to connect to the bank’s core banking solution to authenticate the customer via biometric or PIN.

Cash deposit machines

Hota observed that banks are increasingly installing cash deposit machines (CDMs) so that both financial inclusion and mainstream customers can benefit. Banks collectively have now got about 10,000 ATMs which also double up as CDMs.

“Currently, the cash deposit facility is available only for their (banks’) own customers. Now, we are going to activate these machines to become interoperable,” said the NPCI chief.

Currently, due to limited business hours of banks, kirana store owners and traders are unable to deposit their collections at the end of the day. Now with CDMs, the merchants can deposit their cash at the nearest machine, irrespective of whether it belongs to their own bank or some other bank, after closing their shop for the day.