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“Is this justifiable? Is this not totally avoidable? Does it not hurt our pride?’’
These words are part of an advisory communicated internally to staff in State Bank of India asking them not to use other banks’ ATMs to reduce costs and improve profit.
After highlighting the bank’s achievements, a senior official in the operations department adds: “There is a jarring note though. I learnt that despite such an extensive network, some of our family members go to other banks’ ATMs to withdraw cash!’’
According to SBI’s data, its employees transact about 280,000 ATM card-swipes in other banks’ cash machines per month.
This costs the bank about ₹42 lakh plus taxes. Every card swiped at other banks’ ATM makes that branch richer by ₹15.
For SBI, this is reducing profits by a staggering ₹5 crore a year.
The advisory assumes importance as it comes in the wake of various other measures being taken by the bank to prune expenditure.
It recently announced it would go slow on recruitment for the next couple of years as staff expenses had gone up by over 35 per cent at ₹5,867 crore in the third quarter of the current fiscal compared to the year-ago period.
The total operating expenses also rose 31 per cent at ₹9,212 crore.
On the other hand, its huge workforce makes it a good business proposition for the bank to motivate them not to use other banks’ ATMs.
As of December 2013, the total headcount of the bank stood at 2,23,675.
Currently, the first five transactions in a month are free in non-parent bank machines and the respective banks have to bear the cost.
This would mean that each bank would have to foot the bill for these transactions. There is no difference between the staffers and general customers in this regard.
State Bank of India has the largest network of ATMs in the country.
“We urge all the staff to make full use of our ATM network. This will strengthen the bonding with the employer while preserving avoidable outage in terms of interchange, that too, to our competitors in the market,’’ the advisory said.
ATM interchange fees also shot up to ₹273 crore, a 29 per cent increase, at the end of December last year.
There is some likelihood that other banks may follow suit. A top executive of a public sector bank said the top five banks, with their vast workforce, might stand to gain from similar initiatives.
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