News

India's government banks partner to add ATMs, subtract costs

May 2, 2012

India's State-run banks (PSBs) will join together to add 65,000 ATMs this fiscal year in a move expected to reduce operating costs for member banks by at least 30 percent. 

An India Times reportsaid the cooperative effort will allow one member bank to tender bids for all PSBs in a region, aggregating the banks' bargaining power to reduce transaction processing costs. A vendor whose bid is accepted will own and operate the ATMs, charging banks on a per-transaction basis.

"In the previous year, vendors had charged banks in the range of [rupees] 13–16 (25–30 cents) per ATM transaction," an unidentified bank official told The Times. "This will come down to [rupees] 8–11 (15–21 cents) per transaction under the unified approach, a reduction of 30–38 percent. Besides, charges will fall by another 40 percent if transactions per ATM crosses 250 each day."

In the tender, banks have proposed that following the contract signing, ATMs should be installed within four quarters at ratios of 25 percent, 40 percent, 25 percent and 10 percent. 

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