After a gap of six to eight months, public sector banks (PSBs) have geared up to establish 60,000 more Automated Teller Machines (ATMs) across the country over the next two years. The state-owned lenders had put their ATM expansion on hold as a centralised outsourcing model was being worked out by a committee appointed by the government.
ATM machine manufacturers and payment service providers will be participating in the bidding process, being led by six major PSBs — State Bank of India, Punjab National Bank, Union Bank of India, Bank of India, Bank of Baroda and Canara Bank.
“This will be a completely outsourced model. The requirements for 22 regions across India have been clubbed into 16 bidding circles,” said a senior official from a payment service provider company.
“We expect the whole process to be completed in June and results to be announced by June-end,” the official added.
According to data from National Payments Corporation of India, the number of ATMs in the country — of private, public, foreign and cooperative banks, part of the National Financial Switch connecting all ATMs — had reached 98,025 by the end of April 2012.
A study by ATM manufacturer NCR Corporation India shows about 70 per cent of deployment has been in urban areas.
“Though the total requirement does not specify an urban-rural ratio, a higher deployment in rural areas is being considered,” said a senior official of a large PSB.
Customised ATMs for rural areas are also being tested. “The machines used in metros may not be relevant in rural areas,” said Jaivinder Gill, managing director, NCR Corporation. He said the company had developed machines that could interact with the user in 23 languages and use biometric authorisation as a safety feature if the user was not comfortable with PIN identification.
Of the ATMs in rural India, about 20 per cent are owned by private sector banks. The ratio is expected to change with the entry of non-bank entities or White Label ATM operators. White label ATMs are those owned and operated by non-bank entities.
“The banking space has seen considerable growth through ATMs, but it has been restricted principally to the urban/metro areas,” said the Reserve Bank of India in a draft report on White Label ATMs released in February.
The central bank said allowing entities other than banks would help the overall objective of financial inclusion. The final guidelines on the proposed model are awaited.