ATM industry seeks lower GST rate, stimulus to address COVID-19 challenges
NEW DELHI: The ATM industry has pitched for a stimulus package along with several relaxations, including lowering of the GST rate, saying the current lockdown due to the coronavirus infection has hit transactions and posed severe challenges.
In a letter to Finance Minister Nirmala Sitharaman, the Confederation of ATM Industry (CATMi) mentioned that it has been recognised by the government as a crucial player to further the financial inclusion.
The COVID-19 situation has caused a sharp decline in the ATM transactions and has posed severe business challenges to the ATM industry, the CATMi stated.”Specifically, in the battle against COVID-19 pandemic, we form a critical link in the distribution of the vital sustenance subsidies (direct benefit transfer) which the Government of India under your leadership has been kindly extending to the financially disadvantaged sections of the society,” CATMi said in the letter.
It has urged the government for an increase in ATM interchange rates, citing recommendations by a committee submitted to the Reserve Bank in December 2019. A bank pays ATM interchange charges for transactions done by its card customers at other bank ATMs.
CATMi said it is leaving no stone unturned in its efforts to keep ATMs up and running, the economic slowdown due to coronavirus pandemic has worsened the financial issues the industry has been facing over the last five years because of increasing cost on operations and compliances.”The ATM industry today badly needs a stimulus package to keep afloat and augment the banking system in the country and we seek your kind support on the same,” the body said.
Seeking for an urgent intervention by the finance ministry, CATMi said measures such as bringing down GST rates from the current 18 per cent to 12 per cent, increase in contract terms by public sector banks for two years to recover costs as well as compensation to brown label ATMs (BLA) with an average transaction of last six months post-COVID may help the industry to a great extent as there has been a huge drop in transaction volumes post the pandemic.
CATMi has also asked for incentives to deploy cash dispensers/cash recyclers for ATM operators to increase penetration in line with the RBI scheme of incentives for banks.It has also requested for GST deferral for six months, extension of working capital loans at RBI repo rates for next nine months, lending up to Rs 10 lakh to white label ATMs (WLA) franchisees from SIDBI at affordable rates without collateral with basic KYC.
The ministry should also consider to extend interest subvention scheme for exporters and include ATM manufacturers in the scheme (scheme has expired on 31st March 2020) and classification of ATM industry as a priority sector for lending activity.
Source- Business Insider.
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