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ATM Cash Replenishment Halted Across Four States
14 Jul
Summary
- ATM services were suspended in Delhi, Karnataka, Haryana, and Uttar Pradesh on Monday.
- Rising wage and fuel costs rendered existing contracts financially unviable for logistics firms.
- Operations are expected to resume soon after banks renegotiate contracts and fees.
Cash management and logistics firms halted ATM cash replenishment services across Delhi, Karnataka, Haryana, and Uttar Pradesh on Monday. This disruption occurred because escalating wage and fuel expenses made current contracts unsustainable. The one-day service suspension led to intermittent gaps in ATM uptime and cash availability as regular replenishment cycles were interrupted.
Industry executives anticipate a resumption of full operations by Tuesday. This follows initial agreements from several private sector banks to renegotiate contracts and adjust service fees. Discussions with other lenders are ongoing. However, public sector banks have not yet joined these negotiations, raising concerns about potential continued vulnerability for ATMs in tier-2 and tier-3 cities.
The situation highlights the significant financial stress within India's cash management sector. Surges in labor expenses due to minimum wage revisions, coupled with increased fuel prices, have squeezed already tight margins. Industry estimates suggest wage costs have risen by 40-50% in the past year, with collective industry losses reportedly exceeding ₹100 crore.
