Recently, banks are reported to have informed RBI and the government of India, about the shortage of ATMS (Automated Teller Machines). And they have also urged a clarity of procurement through government e-marketplace.
What is procurement through the government e-marketplace?
Procurement means buying and selling goods or services using a platform. Here, the platform is an e-marketplace that is known as GeM portal. This portal gathers buyers and sellers to create a business ecosystem. So, procurement via GeM is known as E-procurement. It includes e-tendering. An entire tendering process is done online.
Coming back to the article, In a report in the Economic Times, a senior bank executive quoted that ATM vendors in the country are facing the challenge of insufficient capacity.
What is the ‘Reason”?
According to the industry sources, reported in Business Standard, the reason is “Make in India” guidelines introduced in FY20, which made the vendors set their operations in India only, resulting in India.
In 2019, Finance Ministry Nirmala Sitharaman even asked banks to give preference to Indian firms for ATM procurement under the ‘Make in India’ initiative.
The guidelines were issued by the Department of Industrial Policy and Promotion of Industry and Internal Trade (DPIIT).
The DPITT had directed all departments to evolve an internal system of vetting the restrictive and discriminating terms against domestic manufacturers especially included in the tenders they float with state governments. The norms also stated that there should be no criteria for bidders that would be advantageous to foreign manufactured goods.
ATM shortage; Bankers at the hit
As bankers complain of ATM shortage, they are saying that they are facing significant impacts on particularly lockable cassette machines in the ATMs.
What is a Lockable cassette mechanism?
The cassettes in an ATM are equipped with information like how many notes are contained inside, note currency or denomination, and access history and error codes.
Now lockable cassette machines which is basically swap cassette, it basically includes a cassette exchanger, which enables the cassette handler to transfer funds from one cassette to another without opening or touching the cash inside.
Now this technology is the future of ATMs, but due to the make in India guidelines, the banks are finding it difficult to switch over.
