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Will the merger of public sector banks impact the country’s already shrinking ATM network? There seem to be no easy answers for this poser as of now, but experts and industry watchers say that there could be some consolidation in the ATM network with the merger of PSU banks, but customers do not need to worry about services being impacted.
“Just as the merged entity will look to consolidate bank branches in a single area, it would do the same with ATMs. This will bring in economies of scale but is still some time away,” said a former banker, who did not wish to be named, while noting that the number of ATMs are falling for various other reasons.
Radha Rama Dorai, MD - ATM and Allied Services, FIS, agreed, and said, “The recent merger announcements of State-run banks will have an impact on ATM numbers going forward, as the consolidation plan will surely take into account the multiplicity of ATMs of the merging banks in a location or its vicinity. In the merger, the merged entity will give preference to continuing with an ATM outlet that has good transactions, is well located and is fully compliant with regulatory norms. This may result in the other ATMs getting shut down or relocated after necessary upgradation. However, it is difficult at this stage to ascribe any number.”
The Finance Ministry had, earlier this year, announced plans to merge 10 public sector banks into four larger entities. The banks are already working on ways to ensure seamless customer service.
RBI data reveals that in the case of the merger of Vijaya Bank and Dena Bank with Bank of Baroda, the impact on the ATM network has been very limited till now. But consolidation of branches and ATMs is still underway, it is understood.
The merged BoB had an ATM network of about 13,411. However, according to the RBI’s annual report, the number of ATMs in the country declined to 2,21,703 by March end 2019, from 2,22,247 in March end 2018.
While the government is hoping that digital payments will cut down on the need to withdraw cash and the use of ATMs, an RBI committee is also looking at the ATM fee structure in order to boost the network. White label ATM operators also remain upbeat about ATM infrastructure and cash recycler machines, provided the fee structure is made more beneficial.
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