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ATM Machines

Recently I had to make a big purchase (about 500 USD) at a shop which charges extra fees for Credit Card transactions. Hence, I was forced to go to the nearest ATM to withdraw money and stand in its long queue.

The only bills it dispenses is 100/- INR bills which are worth little more than 2 USD. So literally I had to swipe my ATM Debit card 7 times to withdraw just 25000/- (about 500 USD) money. After that, I am left with 250 bills, a mammoth task to count, and not to mention that the time this transaction took really pissed off the guys waiting for their turn. One guy even jokingly asked me, is there any more cash left in the machine?

I almost regularly run into credit card bills of 5 digits, and on several occasions even 6 digits. Yet, I have never seen a 1000/- (20 USD) bill, the highest bill issued by Indian Government. Most ATM machines only dispense with 100/- bill, whose value over time has reduced to so little that people are left with only 2 choices,
a) carry suitcases or purses instead of wallets.
b) use cheques/plastic money.

Inflation is high in India and currency is getting devalued. Other governments realize how cumbersome it is and issue Yen, korean Wons, Indonasian Rupiya in bills having a face value in 5-6 digits (10s to 100s of thousands). Zimbabwean government started issuing bills in units of millions of local dollars.
So why is Indian government waking up and trying to address this problem by issuing bigger bills.

Also I was thinking that lately getting change has become extremely more difficult. Because of convenience people have started going to nearly ATMs instead of traveling great distances for a bank branch. Net result is that their wallets only contain 100/- bills. No 1,2,5/- coins, 10, 20/- bills. The problem is so acute that often the bus drivers and shop keepers have to turn down the customers because they fail to produce the exact change. I wonder what would be the best solution for this problem?

100/- notes only from the ATM?

15 replies on “ATM Machines”

Well i thought they also dispense 500 notes …
at least they do dispense them in mumbai. They may be cutting back stocking rupees in atms in tight liquidity conditions.
i also think dispensing Rs1000 will increase their risk per atm and people in india hardly ever remove more than 10000 per transaction

Agree that inflation is killing – the wpa is a joke and one may not need to exclaim if it reaches 17% by yr end thanks to the oil subsidy bonds
Both the govt and rbi are giving lip service- worse the govt is much to busy as it fights for survival read
Indian Govt at its weakest?
http://techntrek.wordpress.com/2008/07/09/indian-govt-at-its-weakest/
http://techntrek.wordpress.com/2008/07/04/indian-central-bank-giving-lip-service-to-inflation-control/

Plus fanny and freddy 5 trillion problem can mean a further devaluation in the dollar and a major oil spike and the fisc deficit could pass 10% mark if same level of subsidy continues.

Even americans are starting to save – cutting back on travel etc When will we?
nyways is it start of the last phase of correction which will take the markets to the pits?

well last time it did not dispense 500 or 1000 rupees bills 🙁 however i wonder how stocking 1000 bills would increase the bank expense?
remember an ATM machine has limited space and it costs the bank a lot to move currency in armored vans (however it also costs banks to stock money idle in the ATM machine)

it costs the bank a lot to move currency in armored vans

doesnt carrying 1000 buck notes not increase the risk
also had heard that banks are cutting on the total currency stocked
per atm to reduce idling funds

but on the same time they are installing multiple atms in the same location to cater to the rush hours…
neways its a decision that banks need to make.. as long as i can withdraw money without having to travel much or wait in a queue i don’t care

Ankur,
I still dont get why the merchant charge more when we use credit card. Once I walked out of an electronics store when he said i will be charged extra if I pay using my debit or credit card.
Thats bad. The merchant is indeed paying for the machine and the connection to the visa/mastercard server.. but then its for their (and the customers) convenience.
I think its because the transaction will be recorded and can be taxed by the sales tax guys.

At petrol bunks my credit card will charge me surcharge if the amount is less than 400. else I don’t have surcharge… so put petrol worth 401. 😀

usually the bank do deduct about 2.5% on every electronic transaction. so maybe the merchants who do not appreciate how credit card significantly modifies the consumer behavior (spending without feeling the pinch of how expensive the shopping trip was) discourage cc spending

Just when we thought ATMs were worse, the banks are even worse. i walked into ICICI today to withdraw 50k. and I got the entire amount in 50’s 🙁
Anyways it was sealed 100 each into 10 bundles. I did not count them. HOW can I?
I asked them for 1000 Notes and they DID NOT have those.

man i don’t know how you do it, but why is it that the banks/western union etc. all refuse to serve you.

neways you could have always asked them to count the notes on the electronic counting machine… they are quite reliable esp with new bills.

Banks like ICICI want everything to be done without human intervention from the bank side. For non-corporate accounts, they charge extra, if they go to bank for any transaction. But, if they do online, they don’t charge anything extra.

Satish how can u blame them. They care about value and costs unlike the PSU banks which hardly bother about the customers or shareholders or numbers and and are generally heavily overstaffed but still bureaucratically tangled.

Prax, I am not blaming any bank for forcing everyone to do online. Forcing everyone to do everything online is a very good thing, and it saves a lot of time and money for customers as well as the company.

I have just mentioned the priorities of the banks in reply to Ankur’s comment on “why is it that the banks/western union etc. all refuse to serve you” for Xylene’s problem at bank.

The biggest e-commerce site in Asia charges extra money for using online. I don’t know when will these government companies change (By the way, the site is IRCTC).

I agree that ATMs should stock notes in different denominations. Surely, this isn’t such a big deal in terms of logistics, given that ATMs are so close together in cities anyway. At least 50s, 100s and 500s, I would say..

So true. What I do is completely dierfefnt from what I went to school for, but once I found what I should be doing, it was impossible to ignore. I only wish I’d found it sooner, bet better late than never.

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