The first bank to introduce the ATM concept in
India was the Hongkong and Shanghai Banking Corporation (HSBC). It was
in the year 1987. Now, almost every commercial banks gives ATM
facilities to its customers.
The first bank to cross 1,000 marks in installing ATMs in India is
ICICI. SBI is following the concept of 'ATMs in Quantity'. But Private
Sector Banks have taken the lead. ICICI, UTI, HDFC and IDBI counts more
than 50% of the total ATMs in India.
Public Sector Banks are also taking the installation of ATMs seriously
for Indian market. They are either setting up their own ATM centres or
entering into tie-ups with other banks. The Corporation Bank has the
second largest network of ATMs amongst the Public Sector Banks in India.
The Indian banks have also come up with a 'Swadhan' scheme. Under this
scheme, the banks can use each other's ATM at a cost, usually Rs. 35
extra from their customers. The main feature of 'Swadhan Card' are as
follows:
- No exchange fee charged to change an old ATM card for a Swadhan
card.
- Rs. 3,000 fixed as the ceiling on withdrawal.
- Exception made for select customers who can withdraw up to
Rs10,000. Still, this is lower than the average withdrawal of
Rs15,000 by regular ATMs.
- IBA gives banks the discretion to decide a higher maximum amount
for withdrawal.
- Transactions conducted through any of the member banks appear on
a bank statement, which is given only by your own bank.
- All transactions conducted in any of the member banks appear on
the bank statement, but only your own bank will provide this.
Note :- No overdraft facility is available on Swadhan
cards.
How 'Swadhan Card' works
All informations and transactions are routed among member institutions
through a switch. The switch transmits the information and/or data to
bank which has issued the card or to its processor, which on the other
hand either approves or declines the transaction request and notifies
the switch. The decision of the card-issuing bank's is then routed by
the switch to the processor of the ATM, which completes the transaction.
The accounts among members are settled and account balances are
transmitted at the end of the day to each member institution.
Cost of setting ATM center
Approximately Rs.1mn it takes for the setting of an ATM center.
Rs.1.2-1.4mn per annum is needed for its maintenance. To keep the cost
in equilibrium position, there should be around 250-300 transactions per
day per ATM.
To overcome or to reach the break-even point, the banks are always
encouraging its customers to use the ATMs. Banks like HDFC and Citibank
even charge penalty if a customer visits the branch.
NCR India and HMA Die bold are the main two players in this market to
set up ATMs in India. The market, according to them is whopping 100% and
they are very optimistic to see 30,000 ATMs in India very soon.
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