Five ATMs shut down each day: Govt of India plot alleged to "undermine, privatize" public sector banks

By Our Representative
Following reports that ATMs across India have gone cashless, bringing back nightmares of the cash crunch during demonetisation, especially in Gujarat, Uttar Pradesh, Madhya Pradesh, Bihar, Andhra Pradesh, Manipur and Telangana, top civil rights leaders and bank association office bearers have suspected this is nothing but they have called in a joint statement "mad rush" of the Modi government "to join the league of cashless countries".
Of the 80-odd persons who have signed the statement are Medha Patkar of the Narmada Bachao Andolan, Aruna Roy of the Mazdoor Kisan Shakti Sangathan, Nikhil Dey of the National Campaign for People’s Right to Information, CH Venkatachalam of the All India Bank Employee’s Association, Sucheta Dalal of the Moneylife Foundation, and Thomas Franco of the All India Bank Officers’ Confederation, Gautam Mody of the New Trade Union Initiative, and Prafulla Samantara of the Lok Shakti Abhiyan.
"Many western countries have majorly cashless retail transactions, making ATMs defunct and hence shutting ATMs has become common. In India, even though cash transactions is the predominant mode of transaction, banks are shutting their ATMs down. Since the beginning of 2018, banks have shut down five ATMs per day on an average across the country," the statement says.
It adds, "Between March 2017 and February 2018, 1,695 ATMs have been shut down. Six of the states that are now facing severe cash crunch also witnessed a rapid reduction in the number of ATMs. The worst affected are Andhra Pradesh and Bihar, both of which saw a 3 percent decline in ATMs."
The statement, distributed by the National Alliance of People's Movements, says, "One of the primary reasons stated by the banks for shutting down ATMs is that they are not able to meet the operational costs. A threat of the run on banks is looming large when people cannot access cash, either through ATMs or banks. The extension of public sector banks has been limited, and extension counters, particularly in far-flung rural and Class II and III towns, have been weakened."
The statement further says, "Many of the ATMs that are still available to the public are yet to be recalibrated. It was said that it would take only 90 days to recalibrate over 2 lakh ATMs that are spread across the country. Eighteen months after the introduction of new notes, several ATMs are yet to be recalibrated to hold the new 200 rupee note."
Noting that the new RBI guidelines for ATMs are "not helping the situation either", the statement says, "The Confederation of ATM Industry (CATMi) has demanded that to recover their implementation cost of calibration the customers should be charged Rs 3-5 more per transaction." The current charges, beyond the five free transactions, are Rs 15 per cash transaction, and Rs 5 per non-cash transactions.
It adds, "To add fuel to the fire, the tax department has asked the top banks of the country to pay tax for charges recovered by the banks for not maintaining a minimum balance. This tax directed by the Directorate General of Goods and Services Tax (DGGST) is being levied in retrospect and covers periods even before the introduction of GST. Banks that are already suffering massive losses and facing capital crunch will only pass on the burden to the customers."
"Moreover", the statement says, "A recent tax notice has asked banks to pay tax, penalties, and interest on the free services offered to customers. This retrospective demand will charge 12% service tax claimed retrospective from 2012, 18% interest on the amount, and 100% penalty."
It adds, "This amount would run to over Rs 40,000 crore, which the banks would be passed on to the customers. Banks in India earn a minimum of 6% to 9% on our current and savings account deposits (as opposed to 1.5 to 2% around the world). This alone should be good enough reason to give all banking services free. However, private sector banks earn profit from these charges and public sectors banks use them to cover their non-performing assets (NPAs)."
Calling it "a multi-pronged attack on the people, the public sector banks and the economy at large", the statement says, "This cannot be brushed aside as an outcome of just mismanagement or wrong policies of the government, regulators, and bank management. It appears to be a part of a well-orchestrated and deliberate effort to cause mistrust in public sector banks, dismantle their networks, and pave the way for privatising the public banks."
The statement comes amidst several independent saying that the reasons behind the recent cashless scare include the Financial Resolution and Deposit Insurance (FRDI) Bill scare, not recalibrating the ATMs to hold the new notes, cash hoarding to win upcoming elections, an increase in cash withdrawal to avoid excess charges levied on the fifth withdrawal. Experts have also said that enough currency is not in circulation as the rich are hoarding cash.

Comments

Anonymous said…
More madness