Monday, September 9, 2002		Feature

ATM outlets increase, transactions decrease
S. C. Dhall

OF late public sector banks have been making heavy investments in ATMs. The big question is — are their depositors using ATMs? The ATM installation is on the rise but the usage has not increased. To reap maximum benefits from the investment, banks will need to network the machines and educate not only their staff at lower level but at higher level too.

The ATM market in India has been growing at a tremendous pace. In 2000 and 2001, it grew 100 per cent. Chandigarh, with one ATM for 1000 persons, has the highest number of ATM outlets.

While the number of ATMs is on the rise, transaction per ATM is declining and, therefore, cost is moving upward. Options for banks are now to enhance the capability of the terminals to provide new services.

Banks are installing ATMs without giving proper training to their staff. While most of the banks claim that the number of transactions is on the rise, the actual scenario is quite the opposite. Banks have more dormant cardholders who seldom use ATM card for withdrawal and prefer to use the counter still.

The RBI has directed banks to issue ATM cards free of charge for all eligible customers, who qualify the eligibility criteria fixed by the bank. It has also asked the banks to examine the possibility of offering Internet banking facilities without levy of any fees while extending the facility of ATM cards.

Bank customers using ATMs who are not in the habit of paying attention to the balance accounts may be in for a surprise. In a number of cases, many accounts have been debited twice or thrice for the same transaction. Considered a foolproof technology it has come as a big shock to the customers.

These machines have been basically designed to handle crisp currency notes, but in most of cases it is not possible for many banks to feed the ATMs with new currency, resulting in soiled notes getting into the system. That creates problem for the customers.

A number of banks can increase their physical reach without deploying ATMs at all locations. Instead they can share and use ATMs of other banks thereby saving a substantial amount.