How ATMs work?

Published: 15th November 2016 02:03 AM  |   Last Updated: 15th November 2016 03:00 AM   |  A+A-

By Express News Service

Long queues in front of ATMs are a common sight since Friday as only those that have been recalibrated to handle the new currency notes are working. Express takes a look at how ATMs work and how they are modified to handle the new notes

ATMs are linked to the Central hub

All its transactions are known and tracked centrally

As soon as PM Modi made the announcement demonetising Rs 500 and Rs 1,000 notes, banks took away the old cash and are loading ATMs with new ones after recalibration

How are ATMs recalibrated?
The ATMs can be set  up as per the size of the notes. Once the size of the new notes are made available, slots in the ATMs can be adjusted accordingly. The process takes about half a day, including for testing. It is said that new Rs 500 notes are in transit and will be available in the market in the next 2-3 days. Taking its size into consideration, all ATMs will have to be configured again.

Who handles the ATM?
Agencies handling cash in ATMs are empanelled by individual banks and are also approved by RBI. Normally, they collect the cash from the bank at 10am. But now they have been picking it up at 8am. The agencies are given the password of the dedicated ATMs and their staff deposit money as agreed. They have to be available throughout the day to refill ATMs. Each van carries money as per the agreement between the agency  and the bank.

How much cash can an ATM keep?
There are two bins in an ATM. Each bin can contain Rs 2 lakh. Hence, each ATM can store Rs 4 lakh. Banks have outsourced the work of handling the cash in the ATMs to empanelled agencies with whom they have clear agreements. In the case of ATMs that are located quite far from the bank, these agencies are given a holding limit under the agreement so that even if the cash in a ATM is over and needs refilling, the agency need not necessarily come all the way to the bank to collect the cash.

How many times are ATMs refilled?
Refilling depends on the number of transactions. Considering the current situation, banks say they are refilling ATMs at least 2-3

Old Rs 100 notes to continue
The old Rs 100 notes that were supposed to be returned by banks to the Reserve Bank of India will be pressed into action for the next few days till the situation is under control. Since people have been complaining about not being able to get change for the Rs 2000 notes now in circulation, this decision was taken by the authorities.

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