R20 million in cash could’ve been looted from ATMs; repairs will cost banks much more
- More than 1,400 ATMs and close to 300 bank branches were damaged by looters in Gauteng and KwaZulu-Natal.
- It's estimated that R20 million could've been stolen from ATMs during the unrest, according to the Banking Association South Africa.
- But the cost of replacing a single ATM – R385,000 – is likely to be much more costly to the sector.
- For more stories go to www.BusinessInsider.co.za.
Approximately R20 million in cash could've been looted from ATMs in Gauteng and KwaZulu-Natal during the wave of unrest that swept over the provinces in mid-July. This estimate is by no means an exact account of the total losses incurred by banks due to the looting and destruction, warns the Banking Association South Africa (Basa).
More than 1,400 ATMs across Gauteng and KwaZulu-Natal were vandalised during the unrest which left 337 people dead, many more injured, and thousands arrested for public violence. Close to 300 bank branches and post office outlets were also damaged, according to Basa.
Hundreds of malls and thousands of shops were looted and damaged – some being burned to the ground – in riots which threatened the supply of food and fuel.
Banks were especially hard hit by the unrest. Branches in Gauteng and KwaZulu-Natal closed to protect clients and staff. ATMs, which were unscathed in the looting, were still not refilled for fear of attacks on cash-in-transit staff.
In the wake of the deadly unrest, the banking sector, like most industries across the two provinces, is still counting its losses.
"The damage [sustained to banking infrastructure] was quite extensive," Bongiwe Kunene, the managing director of Basa, said in a press briefing on Thursday morning.
"We have 269 banks impacted and the damage has been assessed and we're working on restoring those branches… but we also have more than 1,400 ATMs which were damaged, and the damage varies in terms of severity. So, I would say the banks were not spared the violence and impact of the unrest."
The total amount of money looted from ATMs is, however, hard to accurately quantify at this point in time, said Kunene.
"We haven't been able to add up the exact numbers of how much was in the ATMs that were looted [but] what we do know is that we're working with estimates which are close to R20 million. However, that's a rough estimate," Kunene told Business Insider South Africa.
Much of this cash has been rendered worthless due to dye-stain technology which marks notes looted from ATMs. Retailers have been warned to be especially vigilant of discoloured notes in the wake of the looting.
"You may also find yourself out of pocket after releasing goods or performing services because you will not be able to utilise the currency you were paid with. In addition, you also run the risk of being investigated, arrested, and prosecuted for the destruction of these ATMs," said Nischal Mewalall, CEO of the South African Banking Risk Information Centre (Sabric).
And while the amount of money looted from ATMs is still be quantified, the cost to replace damaged machines is expected to be much higher.
Replacing a single ATM costs around R385,000, and this excludes installation fees, according to Kunene. Although not all vandalised machines will need to be completely replaced, just 60 new ATMs – 4% of those identified as being vandalised – will cost more than the cash looted.
"The complete rebuild programme that we have worked [out] for ourselves has already started last week and it should last for a period of two months," said Kunene.
"So, we expect that all the ATMs will either have been refurbished or fixed or replaced within two months."
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