Come April 1, the RBI ruling to throw open the usage of ATMs owned by a particular bank to the customers of another bank free, will come into force.
Just a few hours before the entire ATM network—numbering over 40,000 —of the domestic banking industry being available to customers from any bank for transactions for no fee at all, irrespective of the banks in which they have their accounts, commercial banks are waiting for an intimation from the Reserve Bank of India (RBI) about charges that banks will collect from each other for having other customers use their networks. Bankers also mention that the new regulation would not come in the way of their ATM network expansion plans
However, going by the RBI directions, the bank whose ATMs are being used may not charge anything to the users who is a customer of another bank, but will be able to charge a fee to the banks which maintains the account of that customer.
But the banking regulator, RBI is yet to inform anything to the banks in this regard, said bankers which are now deploying smarter strategies to make the most of out new system. “This is an industry issue and we cannot charge anything of our own. We are waiting for the RBI intimation,” said sources at ICICI Bank which owns second largest ATM network in the country. Till March 31, the banks can charge not more than Rs 20 which has to be paid by the other banks’ customers for the use of the ATM owned by another bank.
The large public sector and private sector banks including State Bank of India,Punjab National Bank, ICICI Bank, HDFC Bank and Axis Bank which have larger ATM networks in place, especially where ATM usage are high, are now expecting to earn hefty fee income from the usage of their ATMs by the other bank’s customers.
In fact, bankers rubbish the initial concerns that the new guidelines would create a bottleneck in the expansion of existing ATM networks of individual banks. RP Sinha, deputy managing director, SBI, says, “No way we will go slow on opening ATMs. We enjoy 1/3rd of total ATM population in the country and we have been witnessing 300 hits per ATM per day on an average.”
A Union Bank of India official says, “The more ATMs we have,, the more people will turn towards our branches to open their accounts which will help my bank to increase its customer base in future. We are even targeting grabbing a good chunk of the customers from our peers in private and foreign banks that are having quite less ATMs in the country, compared to ours.” Currently UBI is witnessing 125 hits on an average per ATM we have.
Hemant Kaul, executive director, retail banking, Axis Bank, says that he other banks are expected to charge his bank around Rs 20 per transaction when our customers use the non-Axis Bank ATMs and vice-versa.” We are not expected to lose much in such a scenario as Axis Bank ATMs are strategically located nearby airports or railway stations, or in the areas where the bank’s customers work or reside,” he said.
Axis bank’s ATM:branch ratio is 4.25:1 at present the bank has a wide network of about 3,600 ATMs across the country.
“We thus expect a huge traffic of non-Axis Bank account holders’ transactions at our ATMs. We expect an average transactions surge of around 30% across our ATM network after April 1, 2009. And thus, we will equip the ATM machines with extra cash accordingly.
source: The Financial Express
