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One in three ATMs in India doesn’t work

A man exits a HDFC Bank branch in Mumbai, India.
Dhiraj Singh | Bloomberg | Getty Images
A man exits a HDFC Bank branch in Mumbai, India.

Almost one-third of the cash machines in India have been found non-functional, according to a survey conducted by the Reserve Bank of India, the country's central bank.

"Incidentally our teams have recently undertaken a survey of almost 4000 automated teller machines (ATMs) across the country with sample size fairly representing geographies and bank categories. Almost one-third of the ATMs were found to be not working at that point," RBI's deputy governor S S Mundra said at a banking event in Mumbai.

The survey also found that a number of ATMs are failing to provide access services for the disabled and are not very customer friendly. Mundra said the RBI will be taking the necessary supervisory action in this regard.

India is home to nearly 200,000 cash machines, as per the RBI data. With a population nearing 1.3 billion, that amounts to one cash machine for 6,500 people. According to data from the World Bank, in 2015, there were nearly 18 cash machines per 100,000 adults. The data also suggests that nearly 21 percent of the world's unbanked adults are in India.

However, a number of efforts have been made in recent times to encourage individuals to open a bank account. In 2014, Prime Minister Narendra Modi launched his grand plan for financial inclusion that extends banking facilities to the huge population residing in rural India. The program also outlined setting up of nearly 20,000 ATMs across the country for easier access to finances.


Official data from the government suggests that nearly 210 million bank accounts have been opened in the first two years of PM Modi's leadership.

But a huge number of this population resides in rural areas that may not have access to a bank branch and hence cash machines become a very important part of their day-to-day lives. In the light of this, the current figures from the RBI suggest a major challenge that consumers in remote locations with new bank accounts may be facing.

The survey also warns against increase in fraudulent withdrawals from ATMs using duplicate cards and other risks in online banking.

"It is imperative to have a robust mechanism to prevent incidents of fraud in areas of mobile/net banking and electronic fund transfer so as to retain customers' confidence in these delivery channels. Raising customer awareness on safe usage of such channels should also be an important item on the agenda of the banks," Mundra said.


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