The finance ministry will push for lower third-party ATM charges in a bid to increase financial inclusion, risking further unpleasantness between the government and the Reserve Bank of India, which is not enthused by the idea...............
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The hurry with which UIDAI project and White Label ATMs are being marketed by finance ministry involving financial inclusion and direct transfer of benefits under government sponsored programmes is intriguing. Going by Economic Survey 2011-12, UID project has so far generated 13 crore Aadhaar numbers and assuming a 75% capability(10lakh UID numbers a day) utilisation, it would take at least 5 years to cover the country’s population. To pressurize citizens to acquire UID numbers these have already been ‘recognized’ as valid proof of identity and proof of address for various purposes including LPG connection. Pushing ATMs in places where banks are yet to reach with the promise of ‘direct transfer of benefits’ to a clientele yet to be initiated to banking services is another case of putting cart before the horse.
Past experience in areas like microfinance has shown that, given an opportunity, private sector has been merciless in collection of service charges from helpless customers. At this stage, therefore, it would better to go slow on allowing non-banking entities to operate ATMs. Instead, banks should be encouraged to open more ATMs in smaller places where bigger branches (in terms of number of customers) exist. This would be more cost-effective and ensure more reliable service. Another option worth considering is fast-tracking the proposal of Department of Posts to open ATMs and networking them with banks.
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