There are only seven Automated Teller Machines (ATMs) for 1,00,000 adults in Pakistan where banking happens to be one of the fastest growing and profitable industries.
The official data reveals that as of June 30th (2014) there are 8,240 ATMs across Pakistan, the country of 184.35 million of which 65 per cent people are adults.
Further, a spokesman of the State Bank of Pakistan (SBP) told Pakistan Today that 1,00,000 of the country’s total 12 per cent banked population were reliant on only 37 cash machines for their financial transactions at public places.
“This number is not sufficient,” Abid Qamar, the newly-appointed chief spokesperson of SBP, told Pakistan Today.
In view of the acceptability of ATMs and 12 per cent of the country’s total banked population, the State Bank believes there was a need to increase financial literacy and acceptability of electronic banking channels among the people.
“At this time, 37 ATMs are facilitating 1,00,000 banked population of the country,” the chief spokesman added.
Citing PSD Master Circular of 2005 the country’s banks reported, Qamar said the number of ATMs in Pakistan stood at 8,240 up to June 30 this year.
“ATMs per 1,00,000 adults in Pakistan are around 7,” he said.
Asked if this number was perfect, the spokesman replied in negative and referred to the World Bank’s statistics for 2012 that put ATMs requirement for 1,00,000 adult people in Pakistan at 5.42 units.
The World Bank had quoted this number at 4.27 in 2010 and 4.71 in 2011. “At this time, 37 ATMs are facilitating 1,00,000 banked population of the country,” the SBP spokesman said.
This number, he said, should match at least the average of the region. Sensing that the banks were compromising on international standards of customer services the SBP, on October 4, 2012, had issued a circular (BPRD Circular No 03 of 2012 asking the former to ensure a branch-wise placement of ATMs.
“Effective from CY2013 onwards, all banks shall add one ATM in their network against each new branch to be opened in a CY,” said the SBP circular issued by Additional Director Muhammad Akhtar Javed.
The move was aimed at improving the coverage ratio of ATMs and meeting minimum international standards, the circular said.
“Therein banks having less than 1:1 ATM per branch ratio were instructed to cover their existing gap in five years starting from CY13 at the rate of 20 per cent each year,” said the SBP chief spokesman.
Any non-compliance, the circular warned, would make the concerned bank “ineligible” for future branch expansion in addition to any other appropriate penal action under the relevant law.
While the profit-conscious banks explicitly are lagging far behind in terms of their compliance with the State Bank’s order, the latter deems the contemplation of any action as “NA” (not applicable).
Chief spokesman Qamar, rather, said the banks over last couple of years had been making “progress” for complying with the SBP’s instructions. That was why, he said, the number of ATMs in the country had increased to 8240 in FY14 from 6,757 of FY13.
However, the spokesman conceded that there still was a gap between demand and supply of ATMs in Pakistan.
“So far, there are 11,199 branches across the country,” he said. “SBP estimates the number of ATMs should equalise to that of number of branches,” the spokesman added.
Given the central bank’s branch-wise criterion for ATMs and total 11,199 bank branches, the current countrywide shortage of cash machines stands at 2,959 units.
It means the banks are sitting on a huge investment of $ 20.7 million as one ATM, according to a distributor of ATMs President Touchpoint Veqar ul Islam, is priced at $ 7000 in international market.
The World Bank defines ATMs as computerized telecommunications devices that provide clients of a financial institution with access to financial transactions in a public place.
