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| Now, ATMs can advertise financial products |
| Vrishti Beniwal / New Delhi Feb 11, 2012, 00:26 IST |
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Banks with a large network of automated teller machines (ATM) will now be able to generate additional revenue by advertising financial products offered by other institutions.
With an eye on financial inclusion and to incentivise banks for opening ATMs in remote areas, the finance ministry has allowed bank-owned as well as outsourced ATMs to display advertisements of other financial products. RBI will soon issue guidelines in this regard.
There are about 80,000 ATMs in the country today and the State Bank of India, which has the largest share in these ATMs, is likely to benefit most. Among private players, Axis Bank and HDFC could also gain. Banks with a small ATM network would benefit by getting more visibility for their products at large bank ATMs.
These products carry the approval of various regulators like the Reserve Bank of India, Securities & Exchange Board of India, Pension Fund Regulatory Development Authority and the Insurance Regulatory Development Authority.
A finance ministry official said it had been a long standing demand of the industry to allow outside vendors to advertise financial products of other banks and financial institutions apart from the products of the sponsoring bank for a fee. The official added that the advertising revenue would enable banks to reduce transaction costs of ATMs.
Currently, banks work on a outsourced model based on per transaction basis for ATM deployment. The cost of setting up of an ATM is about Rs 5-6 lakh. Advertising revenues can offset a part of this cost and make the proposition more viable for banks.
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