A representative of the Confederation of ATM Industry said ATM players were not consulted about the move and they received the news via media platforms.
The new Rs 100 notes will require a recalibration of 240,000 automated teller machines across the country, and the process will cost the industry about Rs 1 billion and take more than a year, said ATM operators.
The Reserve Bank of India announced on Thursday it would soon release lavender-coloured Rs 100 notes bearing the signature of Governor Urjit Patel.
The dimensions of the new banknote, according to the RBI’s notification, would be 66 mm x 142 mm, significantly smaller than the existing one, which measures 73 mm x 157 mm.
“We believe the exercise of recalibration for new Rs 100 notes could cost over Rs 1 billion and take 12 months,” Loney Antony, managing director, Hitachi Payment Services, said, adding the process could take longer if not managed well.
A representative of the Confederation of ATM Industry said ATM players were not consulted about the move and they received the news via media platforms.
This is the fifth new banknote size to be issued by the central bank since demonetisation in November 2016, and is different from the sizes of both Rs 200 and Rs 2,000. The production of the new notes has already started in Devas and will start in other mints as well, a senior government official said.
The difference in dimensions of the old and new Rs 100 notes could pose a serious problem.
“There are four cassettes in every ATM. The different dimensions of the Rs 100 note will mean that two cassettes will be used for a single denomination, leaving only two cassettes for the higher denomination notes. This will reduce the cash carrying capacity of ATMs,” said Sanjeev Patel, managing director, Tata Communications Payment Solutions.
He added it would not only increase the cost of carrying cash for ATM operators but could also cause a cash crunch.
Having learnt its lessons from previous experiences of cash shortages, the RBI, after consultation with the government, will go slow in rolling out the new, smaller Rs 100 notes.
“The pace of the roll-out depends on the demand for Rs 100 notes in various parts of the country, and it is one of the most demanded denominations. It also depends on the old Rs 100 notes, which come back to RBI chests. A lot of those notes will be put back into circulation. We don’t want to extinguish them till there are enough of the new notes in circulation,” an official said, adding the recalibration of ATMs would -09o*be a slow process and carried out in phases./
The ATM industry raised the possibility of a cash shortage if the supply of the new notes did not match the number of cassettes being recalibrated.
“There is a likelihood of an imbalance between the supply of the new notes and the withdrawal of the old notes, especially in the hinterland. If the supply of the new currency is unable to fill the gap created by the withdrawal of the old currency, the dispensation of Rs 100 notes through ATMs will get affected till such time as the imbalance exists,” said Radha Rama Dorai, managing director, ATM & allied services, FIS, a payments service provider.
The RBI started slow on new Rs 200 notes and has ramped up production in the last few months because of demand, and the same process would be followed for new Rs 100 notes, an official said.
One of the key reasons for the cash crunch in April was the conversion of Rs 2,000 cassettes for new Rs 200 notes.
“The supply of Rs 200 notes is not enough. While some ATM operators have not recalibrated their cassettes, the ones that have recalibrated are suffering from empty cassettes,” said an ATM operator.
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This is how the new Rs 100 note looks like