Money & Banking

Finance Ministry considering district-wise rollout of ATMs

Anjana Chandramouly Bangalore | Updated on October 22, 2011


Will ensure better distribution; shared infrastructure will reduce costs for banks

With an aim to make ATM operations more viable for banks, the Finance Ministry is considering distribution of ATM roll-out district-wise on the lines of the ‘one district one bank' model. A shared infrastructure, it feels, would reduce the cost of setting up the ATM infrastructure and ensure better distribution also.

In fact, banks are open to ATM infrastructure-sharing model where the licence to set up ATMs could now be distributed district-wise to banks or service-providers, and the ATM infrastructure sharing could be fee-based.

White-label ATM

“We feel it's better to distribute district-wise, and some bankers have also mooted the idea of white-label ATMs,” Ms Shubhalakshmi Panse, Executive Director, Vijaya Bank, told Business Line.

White-label ATMs are those which are not bank-owned but outsourced completely to service-providers. However, the Reserve Bank of India is against setting up of white-label ATMs in India.

“Currently, we are discussing the modalities of ATM-sharing and hope to finalise soon,” said Mr A. S. Bhattacharya, Chairman and Managing Director, Bank of Maharashtra.

He pointed out the Government is yet to decide on this issue.

According to some bankers, the Government has the following options — allow banks to purchase ATM machines and outsource all other facilities; outsource the ATM services completely; or own the entire ATM operations.

To reduce cost

“The idea is to reduce cost and avoid duplication of efforts,” pointed out Mr Bhattacharya. By doing this, he added that the Finance Ministry hopes to reach out to underserved rural areas better.

One bank could bid for a district and others could just plug into that bank's ATM, said Ms Panse.

On the other hand, she added that some bankers have also suggested setting up of an ATM Corporation of India, which would be entrusted with the responsibility of setting up of ATMs in the country, on the lines of the National Payment Corporation of India.

Published on October 21, 2011

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