US-headquartered NCR Corporation, which controls nearly half of the ATM market in the country, on Thursday said cash is coming back into the system and it does not feel threatened by the digitisation drive.
"The cash in the economy is at Rs 18 trillion, which is back to the pre-demonetisation levels. As cash gets made available, transactions at ATMs are also going up," the company's managing director Navroze Dastur told reporters.
"Cash has bounced back as the consumers are going back to the automated teller machines (ATMs)," he said, adding the demand for cash had dropped "artificially".
Citing official RBI data, he said transactions per ATM per day and also number of transactions at all the monthly transactions at ATMs are increasing and going back to the pre-demonetisation levels.
He said India can only aspire to be a less cash economy given impediments on infrastructure, technology and application availability, and not a cashless economy.
Successes on the digitisation front are limited to the metros and urban areas, he said, adding that cash continues to rule in the rural ones where the ATMs are used to withdraw subsidy transfers into bank accounts.
He said demonetisation, and the scarcity of cash created because of it, did impact the ATM business. Banks added only about 1,000 new machines in the year to October, but there were replacements of nearly 25,000 machines which helped the industry.
The company's revenue growth was also supported by the export business, Dastur said, adding that it continued with the 20 per cent growth in the topline to Rs 25 billion in FY17. He, however, did not disclose the profits from India operations, where it employs over 3,600 people.
When asked if stress on digitisation is an existential threat to the industry, Dastur seemed to reply in the negative and added that it expects demand for both new ATMs as well as replacements from now on, as transactions grow.
He said the company expects higher demand for new ATMs in rural areas to deepen the network as the direct benefit transfer scheme of the government grows, while in the urban areas it will be a case of replacement demand where smart ATMs should replace the ageing ones.
The company today launched two new ATMs in the Indian market which include one cash dispensing one and another which accepts cash as well. The new machines are biometric input enabled and have a screen that would resemble a smartphone.
Dastur said it has already received orders for over 1,000 units of the ATMs, which includes 500 from Vakrangee.
When asked about sell-off of operations in Kerala and Bihar, he said NCR has taken a decision not to be into asset ownership and rather concentrate on an end-to-end service player.
On the RBI decision to stop subsidies given to banks for ATM installations, he hinted that it will not impact as the cost of the units has come down drastically over time due to which lenders did not avail of the subsidy at all.