KATHMANDU, Oct 1: Banks and financial institutions have started dispensing Rs 100 notes through some ATMs following a directive from Nepal Rastra Bank, providing easier access to small denomination notes ahead of the Dashain festival.
Banks have begun loading new Rs 100 notes into selected ATMs ahead of Dashain, which begins with Ghatasthapana on October 11. Until now, most ATMs dispensed only Rs 500 and Rs 1,000 notes, forcing customers seeking Rs 100 or smaller denominations to visit bank counters.
The new service, introduced on Wednesday, is expected to benefit students, low income customers and people seeking smaller notes for the festival.
Banks have calibrated selected ATMs to dispense Rs 100 notes following the central bank's directive and technical preparations by individual institutions. The service is now available at some major locations in the Kathmandu Valley.
Anuj Dahal, executive director and head of Nepal Rastra Bank's Currency Management Department, said selected banks near major commercial areas have decided to dispense Rs 100 notes through ATMs.
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“Technical arrangements have been made for ATMs at selected locations, including Durbar Marg, Singha Durbar and New Road, to dispense new Rs 100 notes,” Dahal said. He added that the initiative was particularly aimed at helping students and low income customers.
According to the central bank, banks have informed it that between 15 and 25 percent of their ATMs can be configured to dispense Rs 100 notes.
During major festivals such as Dashain, Tihar and Chhath, people traditionally visit bank counters and often wait in long queues to exchange larger notes for new, smaller denomination currency.
To reduce congestion at bank branches and make smaller notes more easily available, Nepal Rastra Bank's Currency Management Department formally asked the Nepal Bankers' Association to arrange for Rs 100 notes to be dispensed through ATMs.
In its letter, the central bank said allowing customers to withdraw Rs 100 notes from ATMs during the approaching Dashain festival could significantly reduce crowds at banks and financial institutions seeking smaller denomination notes.
Copies of the directive were also sent to the Development Bankers Association Nepal and the Nepal Financial Institutions Association.
However, Rs 100 notes cannot yet be dispensed through all ATMs because of technical limitations.
Bankers said many older ATM models have only two cash cassettes or chambers, which are generally used for Rs 500 and Rs 1,000 notes. This makes it difficult to add another denomination.
Newer ATMs, however, generally have three or four cash cassettes, allowing banks to configure an additional chamber for Rs 100 notes. Banks have begun calibrating available chambers in these machines to handle the smaller denomination.
Bankers estimate that around 25 percent of ATMs currently operating in Nepal use newer technology and could therefore be configured to dispense Rs 100 notes immediately.
Nepal Rastra Bank expects the initiative to make cash withdrawals more convenient for students, low income customers and others who need small amounts or change, while also reducing the traditional rush at bank counters ahead of Dashain.
