My Views

Friday, December 29, 2017

New paradigm for ATMs in India

Installing and maintaining of ATMs in India is a wasteful and costly affair. For installing an ATM, a Bank hires a shop undertakes interior and exterior decoration and has a separate air conditioning. Each Bank has its own ATMs. The concept of white ATM has been created but the growth of white ATMs is far from satisfactory.

I propose that Reserve Bank of India should create a separate ATM organization. It should create and takeover most of the ATMs except branch based ATMs.

Right now, a Bank collects new currency notes from RBI gives it to third party agency which carries and fills the ATMs with new notes. You can cut the process short. RBI gives the money to ATM Organization. They stock the currency in ATMs. Whenever a bank customer withdraws the money from ATM, the money is transferred from RBI to his Bank and money is deducted from his account. Physical transaction happens once. Electronic transactions happen twice.

Right now urban areas have too many ATMs. Small towns and rural areas have very few. ATMs should be placed in Malls, Railway Stations and Bus Terminus. These will reduce the expenditure on security also.