ATM Company Employees not received Salary, Staff Protesting and refusing to operate ATMs
A few days ago, several images of ICICI Bank ATMs running out of cash in various locations went viral. This shortage was linked to AGS Transact Technologies, one of India’s largest cash management companies, whose employees refused to stock ATMs as a protest against months of unpaid salaries.
Financial Struggles Threaten AGS Transact
AGS Transact, promoted by Ravi Goyal who owns a 60.5% stake in the company, is facing severe financial difficulties. Despite holding a 15% market share in the cash management industry, the company is reportedly on the brink of collapse. Lenders may soon classify AGS Transact as a non-performing asset (NPA), which could lead to insolvency proceedings. Adding to the pressure, 10% of Goyal’s stake in the company is pledged with lenders.Industry insiders reveal that liquidity issues at AGS Transact have persisted for nearly a year. Reports suggest that an estimated ₹1,000–1,500 crore worth of cash meant for ATMs is at risk due to these unresolved issues.
Banks and RBI Step In
As the problem escalated, banks affected by empty ATMs—particularly those serviced by AGS Transact—raised the issue with the Reserve Bank of India (RBI). A senior executive from a private bank reported that defaults by AGS Transact increased significantly around December 2024.AGS Transact manages over 3,800 ATMs and cash recycler machines (CRMs) under its ATM outsourcing business, with major clients like ICICI Bank, HDFC Bank, Axis Bank, and State Bank of India. However, with service disruptions becoming frequent, most banks have now stopped handing over cash to AGS Transact.
What Went Wrong?
According to India Ratings, AGS Transact’s liquidity problems stem from delayed payments by customers, non-adherence to service-level agreements (SLAs), and unpaid statutory dues. These issues have severely impacted the company’s cash flow. AGS Transact acknowledged these irregularities in a stock exchange filing on February 10, 2025.The company has also failed to pay salaries on time, delayed provident fund contributions, and had its GST registration revoked for not filing returns. Crisil and India Ratings have both downgraded AGS Transact’s credit ratings due to its deteriorating financial situation.
Leadership Changes and Lender Exposure
In November 2024, Stanley Johnson, the company’s Executive Director, resigned. AGS Transact claims it has disclosed all necessary information to the stock exchanges and remains committed to updating investors on further developments.Meanwhile, several financial institutions, including State Bank of India, HDFC Bank, Aditya Birla Finance, and IDFC First Bank, have significant exposure to AGS Transact’s loans. As of September 2024, AGS Transact’s total liabilities stood at ₹1,550 crore.
Future Uncertain as Lenders Consider Next Steps
With limited options for loan restructuring, lenders are expected to decide soon whether to initiate insolvency proceedings to recover their dues. AGS Transact is scheduled to release its December FY25 quarter results today, February 14, 2025. The outcome may provide further clarity on the company’s financial position and future.
