With the number of banks permitting an increase in withdrawal limits of their debit cards on a rise, the cost of refilling the ATM machines with sufficient cash has also taken a toll.

HDFC Bank recently increased the withdrawal limits of its debit cards.  Loney Antony, managing director of payment services firm Prizm Payments, says, "On transactions at other bank ATMs, there is a limit of Rs 10,000 per transaction and only five such transactions are allowed in a month. So banks have to meet the higher limit for only their own customers at their own ATMs. If people withdraw more money then cash requirements may go up."

Jaivinder Gill, managing director of NCR Corporation India, says, "We foresee the withdrawal limit hike to have a positive impact on the number of high-value transactions at ATMs, since customers now don't need to restrict their large transactions to banking hours."

Ramesh Mengawade, CEO, Opus Software and ElectraCard Services, involved in ATM management, says, "The frequency of replenishing cash per week will increase. This would mean additional costs (for vendors refilling cash and in turn banks) as instead of five trips, he (the vendor refilling cash) may have to make six trips in a week to the ATM to refill cash."

However, the frequency of cash replenishment depends on the location of the ATM.

"Banks do not want to keep more money in ATMs as it is idle cash and increases their cost of funds. Depending on the dispensing pattern, the frequency of refilling cash will have to be increased.
Banks will have to pay more charges, which could be around Rs 300-500 per day (per additional visit for each ATM)," says an official of a replenishing agency.

Keeping security issues in mind, ATM manufacturers support a lower withdrawal limit on debit cards. Sunil Udupa, president and chief executive officer of AGS Infotech, which installs Wincor Nixdorf ATM machines and solutions, says, "ATM machines have a limit of 40 notes per transaction as a security limit. There have been instances in Bangalore where people were kidnapped and taken to the ATM. At gunpoint they were asked to withdraw money. So, it is a security issue and people should prefer a limit that is small if they do not need to withdraw a higher amount."