HDFC Bank to make its ATMs mini-branches

Cash dispensers to also give loans and approve credit card applications

HDFC Bank automated teller machines (ATMs) might soon give customers instant personal credit, top-up loans and approve credit card applications. The move to make ATMs more than just a cash dispensing tool would help the lender.

Arvind Kapil, senior executive vice-president (unsecured loans, home and mortgage loans), HDFC Bank, said making ATMs double up as branches will lead to cost efficiency.

"There are investments that have already been made by the bank so we are building up on that. Moreover, for any offering to become successful, it is important that we build scale, which can be easily achieved over the widespread ATM network that we have."

At the end of quarter ended December, the bank had 11,843 ATMs and 4,281 branches. The cost of setting up a branch was typically 10 times more than the cost of setting up an ATM.

In the first phase of the exercise, which starts in February, the bank would offer loans under 10 seconds across its ATM network. Last year, the bank had launched a new product using its backend advance analytics that can disburse personal loans in under 10 seconds. At the end of the third quarter of this financial year, the size of the bank's personal loan book stood at Rs 35,494 crore against Rs 24, 988 crore in the same quarter of the previous financial year.

The second phase, which would begin in April, would have ATMs disbursing top-up loans, renewing gold loans and approving credit cards. These services would initially be offered to bank customers. The lender would use advanced analytics to determine a customer's worthiness.

However, Kapil said these ATMs would now also become an acquisition tool and would help in reaching out to potential customers. "We have a click-to-call facility as well which can be used by non-HDFC Bank customers. Once you see the offers on the ATM and you want to avail of these, we will call you back in less than two minutes. With this, we can all get past the barrier of reaching out to customers who are in the do-not-call registry as they would have authorised us to call them (by using the ATM facility)."

These ATMs would become a convenient touch-point for customers instead of branches. "In the pilot project that we undertook, we realised that 40-42 per cent of the customers were using the offers on ATM outside the branch-hour timing. And out of this 50 per cent were doing it between 5 and 9 am."