From SBI to Axis and HDFC Bank, ATMs of all banks are facing the problem of cash shortage these days. The biggest reason for this is the improper service provided by AGS Transact, the company that operates the ATMs. To avoid this, banks are now distancing themselves from this company.
ATM operations hurt by AGS Transact’s: Automated Teller Machine (ATM) is the most popular way to withdraw money. But for some time now, ATMs of many banks are facing the problem of lack of cash. The most affected by this are the ATMs of the country’s largest government bank SBI. About 14,000 of its ATMs are lying empty. Apart from this, about 5,000 ATMs of Axis Bank are also on the verge of closure. So why are these ATMs in such a bad condition? Let’s know.
Why are ATMs lying empty?
There is a lot of turmoil in the banking structure of the country these days, because the country’s big banks like State Bank of India (SBI), ICICI Bank and Axis Bank etc. are facing a lot of difficulties in operating about 38,000 ATMs. The main reason for this is the shutdown of ATM service provider AGS Transact. AGS was responsible for managing the ATMs of all these banks, but due to the glitch in the system, these ATMs are facing the problem of lack of cash. According to ET’s report, SBI has been most affected by this crisis. About 14,000 of its ATMs have stopped working. Out of these, 7,000-8,000 ATMs were managed by AGS Transact, while in the rest, this company used to provide cash filling service. This has made cash withdrawal difficult for SBI customers.
ICICI Bank distanced itself from AGS transaction
ICICI Bank, fed up with the poor service of AGS transactions, has started removing its ATMs from its network. According to sources, in December itself, the bank had raised the issue of poor service before the company’s board. Now ICICI has handed over most of its ATMs to other service providers like CMS Infosystems and Hitachi India.
Axis Bank is also in trouble
About 5,000 ATMs of Axis Bank are fully operated by AGS Transact and these too are on the verge of closure. This has raised new challenges for the bank. According to sources, due to the bankruptcy of AGS Transact, many banks are facing problems in operating their ATMs. The company’s service quality was poor for the last 12 months, and now banks are struggling to remove their ATMs from its network.
Other banks also affected
According to ET’s report, poor management of AGS transactions has also affected India Post Payments Bank (1,000 ATMs) and Yes Bank (more than 500 ATMs). Apart from this, big banks like HDFC Bank, Federal Bank, Union Bank of India, IDFC First Bank, Kotak Mahindra Bank, Punjab National Bank, Bank of Maharashtra and Bank of India have also been affected.
Why have the difficulties of AGS transaction increased?
The financial difficulties of AGS Transact are getting deeper. Due to which the company is not able to provide proper service to the banks. The company has a loan of Rs 726 crore outstanding, after default in payment of which, credit rating agencies like CRISIL and India Ratings have downgraded its rating. Maxwell Aircon India has also planned to initiate bankruptcy proceedings against the company due to non-payment of dues. In the last few months, four independent directors of the company resigned due to personal reasons. However, the company clarified that AGS Transact is trying to solve this problem in collaboration with the banks.
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