Why people in India are not getting Rs 100 notes from ATMs

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Most convenient denomination
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Most convenient denomination

If you've ever wondered why your ATM mostly dispenses Rs 500 and Rs 2,000 notes, there's a reason behind it. For lakhs of Indians, the Rs 100 note is the most convenient denomination, and yet it isn't getting as widely circulated. The shortage is happening as there are currently two differently sized notes of Rs 100 denomination in circulation.

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The reason for a dry run
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The reason for a dry run

The cassettes in ATMs housing these two types of notes have to be calibrated differently. This is a pain point for banks and ATM operators as they need a live list of ATMs configured to the different types of notes. They need this list to map their van routes based on note availability and ATM requirement. Sometimes when banks don't have sufficient quantities of the new Rs 100 notes, they cannot load their ATMs, leading to under-utilisation and faster dry runs.

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Dispensation becomes a gamble
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Dispensation becomes a gamble

Bankers and ATM providers say the only logical solution would be to pull out the older notes so that all ATMs can be loaded across India without playing a daily game of chance. "There's chaos every day. One cassette of Rs 100 denomination for 2.4 lakh ATMs in the country represents 25% of the cash that could be in circulation. And every day becomes a gamble for us because we don't know what notes we are going to get," said Navroze Dastur, MD of the ATM network provider NCR.

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Going the old way
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Going the old way

Only 20-25% of 2.4 lakh ATMs in India are configured to handle the new Rs 100 notes. The remaining ATMs are configured to hold the old notes. For ATM operators, only luck determines the extent to which they can stack up Rs 100 notes in ATMs. "We get only a small percentage of new Rs 100 notes fresh from RBI's treasury chests. Most of the hundred-rupee notes are from retail collection. This makes it difficult to forecast the supply versus demand of Rs 100 notes," said Hitachi India MD Rustom Irani.

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The currency in demand
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The currency in demand

Each ATM has four cassettes. Most operators currently mark two slots for Rs 500 notes, one slot for Rs 200 and another for Rs 100. Each cassette can hold up to 2,200 notes. This combination allows banks to stack notes worth Rs 28.6 lakh in each ATM. Since there is a big demand for Rs 100 notes among account holders, banks see a lot of customers walking in to exchange their notes.

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