The issue comes at a time when higher ATM channel costs have prompted the Confederation of ATM Industry (CATMi) to seek linking the ATM interchange (on cash withdrawals) to the wholesale price index. A fresh increase in the interchange fee from Rs 21 to Rs 21-22 is also being considered.
“We have taken up this matter with the banks. It is up to them to activate interoperability of CRMs as the NPCI has allowed it," said Navroze Dastur, managing director (India) and regional vice-president (Asia Pacific) at NCR Corporation, the world's largest ATM manufacturer.
Why are ATM firms pushing for CRM interoperability?
The nudge towards interoperability had seen deployment of such machines pick up pace around three years ago, with nearly 95 per cent of replacement orders for ATMs being for new-age CRMs. It had set the stage for ATMs to morph into a “virtual branch network”, emerge as a remittances channel in their own right, and cut down cash logistics costs.
“CRM interoperability has the potential to transform cash logistics. However, this impact depends largely on the transaction profile of the location where it is deployed,” said Rupinder Sandhu Anand, chief executive officer, OKI India, the Indian arm of the Japanese ATM manufacturer.
Banks, however, have been reluctant to fully activate CRM interoperability.
At high-deposit sites with a single CRM, interoperability that includes deposits could initially result in higher cash accumulation, leading to more frequent cash-clearance visits by cash logistics providers. On the other hand, a well-utilised interoperable CRM can reduce both cash replenishment and cash removal visits, lowering fuel, vehicle and manpower costs while improving overall operational efficiency.
How can interoperable cash recyclers reduce logistics costs?
Globally, banks often deploy multiple CRMs at a single site to help balance the deposit-withdrawal mix and enhance recycling rates. “In mature recycling markets such as Japan, where virtually all ATMs are cash recyclers, cash logistics companies typically service machines fewer than three times per month on average, which is a fraction of what we do in India," Sandhu said.
Of course, this comes at a price. The bank in which one has an account must pay Rs 25 for every Rs 10,000 deposited to the bank in whose CRM the cash is being deposited. This fee is Rs 50 for a sum higher than Rs 10,000 and up to Rs 50,000. In comparison, banks charge only Rs 19 as an interchange fee for cash withdrawals.
A big multiplier effect of the installation of recyclers is that small business owners can deposit surplus daily cash balances, which would be credited to their accounts immediately without ever visiting a bank branch.
What role do cash recyclers play after the withdrawal of Rs 2,000 notes?
CRMs also help reduce cash-loading costs. The fact that Rs 500 notes are more widely circulated than the now-withdrawn Rs 2,000 notes means more trips by cash vans to replenish regular ATMs with the lower-denomination currency at present.
The total value of Rs 2,000 banknotes in circulation, which was Rs 3.56 trillion at the close of business on May 19, 2023 (when the withdrawal of Rs 2,000 banknotes was announced), has fallen to Rs 5,451 crore at the close of business on April 30, 2026. Thus, 98.47 per cent of this denomination in circulation as of May 19, 2023, has been returned. The Rs 2,000 banknotes, however, continue to be legal tender.
-
Demand for CRM interoperability has come into the spotlight because of higher ATM channel costs
-
Activation of CRM interoperability by banks will set the stage for ATMs to morph into a “virtual branch network”
-
CRMs can emerge as a remittance channel and cut down on cash-logistics costs
-
On an average, 140-250 transactions have to be done per day on an ATM to break even
 "Automated Teller Machine (ATM)")