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Cash machines: Uneven spread, slowing growth

Growth in ATM numbers is down to less than a third from two years ago.

Written by Apurva | New Delhi |
Updated: December 20, 2016 10:45:42 am
demonetisation, demonetisation deaths, old currency notes, black money, atm queues, atm, banks, bank queues, corruption, pm modi announcement, modi, pm modi, india news, latest news, indian express Long queues outside banks and ATMs have become a common sight following PM Narendra Modi’s announcement to demonetise Rs 500 and Rs 1,000 notes. (Express Photo: Praveen Khanna)

Bihar, with 6 times Delhi’s population, has fewer ATMs than the national capital and 7 times more people per machine. Maharashtra and TN are home to over a fifth of all India’s ATMs. RBI and Census numbers demonstrate a stark skew.

For two years now, the growth rate of ATMs in the country has been falling steadily. The year-on-year growth between June 2015 and June 2016 (till when Reserve Bank of India data is available) was just 10.5%, significantly slower than the corresponding growth of 16.6% between 2014 and 2015. Between June 2013 and June 2014, ATM growth had galloped at 36.97%.

An RBI report titled Trend and Progress of Banking in India, 2014-15 noted, “…There was a decline in growth of ATMs of both PSBs (public sector banks) as well as PVBs (private sector banks). PSBs recorded a growth of 16.7 per cent during 2014-15 maintaining a share of around 70 per cent in total number of ATMs. FBs (foreign banks) continued to record a negative growth in number of ATMs.”

There is also a pronounced skew in the distribution of India’s ATMs — just two states, Maharashtra and Tamil Nadu, account for 22.5% of the total number of cash machines, according RBI data on ATMs and banking. In June 2016, India had 2,15,039 ATMs, 48,557 of which were in these two states.

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The RBI data also show a skew in favour of metropolitan and urban areas. For example, Delhi (9,070) had more money machines than 25 states, including Rajasthan, Bihar, Punjab, Haryana, Odisha and Jharkhand. Delhi is the 18th most populated state in India according to the 2011 Census, with 1.39% of the population — however, the RBI data show it has 4.22% of India’s ATMs.

Juxtaposed with Census data, RBI’s ATM data show a stark divide between the urban and rural populations with regard to access to ATMs. 69% of the country is classified as rural, but they have access to 45.93% of ATMs; 31% of the population is urban, but it has access to 54.07% of ATMs.

The slowdown in the growth of ATMs has hit rural India the hardest. Between 2013 and 2014, ATMs in rural India grew by 100%; the following year, that growth fell to 37% and, last year, rural India recorded an increase of a little under 14%.

On this, the Trend and Progress of Banking in India, 2014-15 report said: “In recent years, the shares of ATMs in rural and semi-urban areas have been rising, though urban and metropolitan centres still dominate. In 2015, about 44 per cent of the ATMs were located in rural and semi-urban centres.”

RBI data also show that some of India’s most populated states — Uttar Pradesh, Bihar and West Bengal — had to accommodate far more people per ATM than the country average of 5,631 people/ATM. In UP, Bihar and West Bengal, that figure in 2016 was 10,438, 13,563 and 7,815.

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