Automated Teller Machines (ATMs): India

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This is a collection of articles archived for the excellence of their content.


Automated teller machine numbers


ATM cos see scope for more growth

Mayur Shetty TNN

The Times of India 2013/08/16

The status of ATMs in India in mid 2013
How money reaches ATMs-I
Given above are the logistics involved in moving new notes from the presses to ATMs. Considering that India over 200,000 ATMs across the country (Nov 2016) this is undoubtedly a challenging and complex business.
The Times of India
How money reaches ATMs-II
Given above are the logistics involved in moving new notes from the presses to ATMs. Considering that India over 200,000 ATMs across the country (Nov 2016) this is undoubtedly a challenging and complex business.
The Times of India
How money reaches ATMs-III
Given above are the logistics involved in moving new notes from the presses to ATMs. Considering that India over 200,000 ATMs across the country (Nov 2016) this is undoubtedly a challenging and complex business.
The Times of India

Mumbai: Despite public sector banks adding another 18,906 ATMs to their network in 2012-13 — an increase of 26% — the average number of transactions per machine is keeping pace, indicating that there is scope for growth.

RBI data shows that in June 2012, public sector banks had deployed 56,801 ATMs with average transactions of 183 per day and average daily withdrawals worth of Rs 4.9 lakh per machine. A year later, the number of ATMs has jumped to 75,707 machines and the average number of transactions continues to be close at 167 with average daily withdrawal of Rs 4.8 lakh.

This is good news for the nine companies that have been awarded contracts by public sector banks to invest in ATMs on their behalf and earn a return out of transaction charges they receive from banks. Exactly one year ago, the finance ministry carved the nation into 13 zones and auctioned off each zone to companies that agreed to the lowest transaction charge. All PSU banks have signed contracts with nine firms which include startups, and giants like the Tata group and US-based NCR.

Although average daily transactions have dropped from 183 to 167, bankers say that this is explained by the fact that a large chunk of deployments took place in the second half of the year. “Inadequacy of servicing the entire demand through traditional banking methods and pressure on banks to reduce costs has led to growth of ATM industry in India,” said Vidya Mani, promoter of Electronic Payments and Services India, which has received the contract for installing ATMs in Maharashtra.

June 2015-June 2016, year-on year growth: 10.5%

The Indian Express, December 20, 2016

Cash machines: Uneven spread, slowing growth

Written by Apurva

Bihar, with 6 times Delhi’s population, has fewer ATMs than the national capital and 7 times more people per machine. Maharashtra and TN are home to over a fifth of all India’s ATMs. RBI and Census numbers demonstrate a stark skew.

Since 2014, the growth rate of ATMs in the country has been falling steadily. The year-on-year growth between June 2015 and June 2016 (till when Reserve Bank of India data is available) was just 10.5%, significantly slower than the corresponding growth of 16.6% between 2014 and 2015. Between June 2013 and June 2014, ATM growth had galloped at 36.97%.

An RBI report titled Trend and Progress of Banking in India, 2014-15 noted, “…There was a decline in growth of ATMs of both PSBs (public sector banks) as well as PVBs (private sector banks). PSBs recorded a growth of 16.7 per cent during 2014-15 maintaining a share of around 70 per cent in total number of ATMs. FBs (foreign banks) continued to record a negative growth in number of ATMs.”

There is also a pronounced skew in the distribution of India’s ATMs — just two states, Maharashtra and Tamil Nadu, account for 22.5% of the total number of cash machines, according RBI data on ATMs and banking. In June 2016, India had 2,15,039 ATMs, 48,557 of which were in these two states.

The RBI data also show a skew in favour of metropolitan and urban areas. For example, Delhi (9,070) had more money machines than 25 states, including Rajasthan, Bihar, Punjab, Haryana, Odisha and Jharkhand. Delhi is the 18th most populated state in India according to the 2011 Census, with 1.39% of the population — however, the RBI data show it has 4.22% of India’s ATMs. Juxtaposed with Census data, RBI’s ATM data show a stark divide between the urban and rural populations with regard to access to ATMs. 69% of the country is classified as rural, but they have access to 45.93% of ATMs; 31% of the population is urban, but it has access to 54.07% of ATMs.

The slowdown in the growth of ATMs has hit rural India the hardest. Between 2013 and 2014, ATMs in rural India grew by 100%; the following year, that growth fell to 37% and, last year, rural India recorded an increase of a little under 14%.

On this, the Trend and Progress of Banking in India, 2014-15 report said: “In recent years, the shares of ATMs in rural and semi-urban areas have been rising, though urban and metropolitan centres still dominate. In 2015, about 44 per cent of the ATMs were located in rural and semi-urban centres.”

RBI data also show that some of India’s most populated states — Uttar Pradesh, Bihar and West Bengal — had to accommodate far more people per ATM than the country average of 5,631 people/ATM. In UP, Bihar and West Bengal, that figure in 2016 was 10,438, 13,563 and 7,815.

2016: Out of two lakh ATMs, only 1.2 lakh operational

Out of two lakh ATMs, only 1.2 lakh operational, Nov 13 2016 : The Times of India

Out of two lakh ATMs, about 1.2 lakh are operational [Nov 2016].At present only Rs 100 notes are being disbursed from ATMs.


See graphic:

The Number of ATMs in India, 2016-18

2017: a 0.16 % decrease

Rachel Chitra, Banks shutter ATMs as cities go digital, remove 358 over June-Aug, October 28, 2017: The Times of India

Here's one more proof of Indians going off cash. Between June and August in 2017, the total number of ATMs in the country decreased by 358. By itself, it's a minuscule dip of 0.16%.

But it is a very significant change because ATMs increased at a compounded rate of 16.4% over the past four years. Even though growth slowed to 3.6% last year, this is the first time the number of ATMs has declined.

Decreasing ATM use in cities after demonetisation, and the increase in operational costs have forced banks to take a hard look at how they deploy ATMs. SBI, which has the largest ATM network in the country , reduced its ATM count from 59,291 in June this year to 59,200 in August, Punjab National Bank from 10,502 to 10,083, and HDFC Bank from 12,230 to 12,225.

Banks say rentals for a 7x5-sqft kiosk at airports and prime locations in Mumbai can go up to Rs 40,000 a month.Even in metros like Chennai and Bengaluru, ATM site rentals range from Rs 8,000 to Rs 15,000. Add to that the salaries of security staff and ATM operators, maintenance charges and electricity bills, and the total can range from Rs 30,000 to Rs 1 lakh a month.Electricity is a major expense as ATM kiosks have to be kept at 15-18 degrees centigrade through the day .

An SBI official said the bank closed some of the ATMs after the merger with its associate banks. “We had to decide whether the footfall at an ATM justified its running costs. Most of the ATMs we shut down were at places where another SBI parent or associate bank ATM was within a 500-metre radius. Our customers will not be greatly inconvenienced because of this.“

Some other banks have not shut down any ATM but are going slow on expansion plans.“We need to check the viability. For further expansion, we would need to have sufficient volumes to justify the cost,“ said Parthasarathi Mukherjee, CEO of Lakshmi Vilas Bank, which has 981ATMs.

HDFC Bank, which started rationalising its ATM network in July , plans to shift some of its machines to busier locations. “There has been a shift in customer behaviour from cash to electronic payments,“ Paresh Sukthankar, deputy MD of the bank, had told TOI in an earlier interview. “Customers who were earlier using their debit cards only for ATM withdrawals are now using them for transactions at shops. Teller transactions at branches as well as ATMs have seen a reduction or are flattening out.“

The city-centred growth of ATMs is part of the problem.Eight out of every 10 ATMs are located in cities where digital payments have increased after demonetisation.“More than 83% of ATMs are in urban locations, servicing 33% of the nation's population that has access to net banking, wider point-of-sale network, e-wallets, mobile banking apps, etc, for transactions,“ said Sanjeev Patel, CEO, Tata Communication Payment Solutions. “The people who desperately need cash are in rural locations where only 15% of the more than 2 lakh ATMs serve nearly 67% of our population.“ ATM operators say they need to focus on rural areas now. “Urban India has already got onto the digital bandwagon, rural India has not,“ added Patel.

2017-19: ATM numbers decline, usage increases

Mayur Shetty, July 2, 2019: The Times of India

2017-19: ATM numbers decline in India, but usage increases
From: Mayur Shetty, July 2, 2019: The Times of India

With currency in circulation surging to a new high and the number of ATMs shrinking over the past two years, the average usage of ATMs is on the rise. From the low of 105 transactions a day recorded after the demonetisation in April 2017, average daily transactions have gone up to 130 in April 2019.

What has also contributed to the increase in average usage of ATMs is the fact that banks are issuing more debit cards. In April 2017, at the end of the demonetisation process, the number of debit cards stood at 78 crore. This went up to 88 crore in April 2019. Bankers point out that after ATM regulations were tightened, several banks found it economical to be net issuers and pay the transaction charges of Rs 15 to other banks for use of their ATMs.

ATM usage surge in Tier-II, Tier-III towns

For the week ended June 14, 2019, currency in circulation stood at Rs 22.19 lakh crore—a year-on-year increase of 13%. In April 2017, the amount was Rs 14.17 lakh crore. Given that ATM usage is picking up in Tier II and Tier III towns, where rents are low, the viability of ATMs has gone up.

Another development that is expected to boost ATM usage is the activation of the Pradhan Mantri Jan Dhan Yojana accounts. While these accounts were opened three years ago, many of them are now getting funded thanks to the PM-Kisan scheme that credits Rs 2,000 every quarter into the accounts of low-income farmers.

Currently, the total number of ATM withdrawals in a month is less than the total number of debit cards in circulation. As against the 88 crore cards, the total monthly withdrawals are 80.9 crore.

ATM density: 2016, state-wise

ATM density: 2016, state-wise
The Times of India

Even in normal times, Bihar has 7 times more people at an ATM than Goa, Nov 19 2016 : The Times of India

ATM density. Compared to around 2,000 people per ATM in some lucky states, including Delhi and Tamil Nadu, more than 11,000 scramble for cash at a single ATM in Bihar and Uttar Pradesh

ATM density, 2017: India, China, the world

ATM density in 2017, in India, China and other major nations
From: April 2, 2018: The Times of India

See graphic:

ATM density in 2017, in India, China and other major nations

The experience, the management

How money reaches ATMs

See three graphics:

How money reaches ATMs-I

How money reaches ATMs-II

How money reaches ATMs-III

ATM: A change in banking experience

The Times of India , Sep 12 2015

India and the world, ATMs per lakh of adult population, 2004 and 2013; Graphic courtesy: The Times of India , Sep 12 2015

The former chairman of America's Federal Reserve, Paul Volcker, had once famously remarked that the only useful banking innovation was the invention of the ATM. First installed in Enfield Town, North London, in 1967, the machine has radically changed the banking customer's experience. The ATM Industry Association, a global non-profit industry association, estimates that there are over 2.2 million ATMs installed across the world. A comparison with other major economies shows that ATM penetration is among the lowest in India. Compared to a global average of 34 machines per lakh adults, India has only 13 per lakh.

What ATM swipes cost banks

Banks may lose Rs 3,800 crore a year on card swipes: SBI, September 29, 2017: The Times of India


SBI has said that banks stand to lose Rs 3,800 crore annually due to the investment in card-swipe machines as costs outstrip revenues

SBI, which had 3.4 lakh machines in October 2016 before demonetisation, increased this to 6.13 lakh by July 2017

The country's largest lender State Bank of India (SBI) has said in a research report that banks stand to lose Rs 3,800 crore annually due to the investment in card-swipe machines as costs outstrip revenues.

As of July, banks had a network of 28.4 lakh card-swipe machines — almost double the 15.1 lakh in existence before demonetisation. SBI, which had 3.4 lakh machines in October 2016 before demonetisation, increased this to 6.13 lakh by July this year.

The key reason behind the loss is that average monthly transactions in a point of sale (PoS) terminal continues to be around 150 per month, while the transaction charges on debit cards have been reduced sharply. "In order to encourage card payments, the government has been pushing banks to install more number of point of sale machines and banks are installing on an average 5,000 PoS a day. But the transactions at PoS are increasing at a much slower pace," said the SBI report. It added that if transactions do not gain momentum, this would raise the question of viability of the business for acquiring banks. Acquiring banks are those who install the card-swipe machines as against the 'issuing banks' — a term used to describe card issuers.

According to the report, the acquiring bank loses money in 'off-us' transactions — a term used to describe those payments where the card-issuing bank is different from the bank that has installed the PoS machine. According to SBI, the loss is very high on a credit card transaction, where the acquiring bank has to pay a large chunk to the credit card-issuing bank. The only transactions where the acquiring bank makes money are the 'on-us' transactions, or the ones where the acquiring bank and the card-issuing bank are the same.

"Though the government has proposed various measures to incentivise the PoS infrastructure and banks are installing PoS terminals, in the long-run the business would be viable only if the transactions at PoS surpass ATM transactions — an enviable task indeed," the report said.

Crime/ frauds


Sidharth Bhardwaj, July 22, 2019: The Times of India

Delhi lost ₹2.9cr to ATM frauds in a yr

Only Maharashtra Saw Higher No. Of Cases Than Delhi’s 179 In 2018-19

New Delhi:

The capital reported 179 cases of ATM frauds in 2018-19, the second highest in the entire country, Reserve Bank Of India data has revealed. These incidents — involving amounts of Rs 1 lakh or more — were reported by the banks to RBI.

The data, accessed by TOI, showed that only Maharashtra saw more cases than Delhi (233). In the capital, people lost around Rs 2.9 crore to these frauds. Only Maharashtra and Tamil Nadu lost more money than Delhi at Rs 4.81 crore and Rs 3.63 crore, respectively. The number of incidents also showed a steep rise from 2017-18, when the banks reported 132 cases of ATM frauds in Delhi, involving a total amount of Rs 2.8 crore. The country witnessed an increase in ATM fraud cases in general (up from 911 to 980). Assam, Arunachal Pradesh and Tripura were the only three states that didn’t report a single incident. However, the money lost came down from Rs 65.3 crore in 2017-18 to Rs 21.4 crore in 2018-19.

Police and cybercrime experts, however, said that this was just the tip of the iceberg as amounts of less than Rs 1 lakh were not considered for the data. They said crooks were now employing various means to get control of people’s bank accounts through ATM or debit cards. The most commonly used trick is installing skimmer devices on ATMs and point-of-sale machines, which are then used to fraudulently copy data from cards. This data is then put on blank cards and illegal transactions are carried out. Delhi Police has also found several gangs active in the city who target ATMs where security is not adequate. These gangs target gullible people who come to use the ATM. On the pretext of helping them out, crooks often exchange their cards and then empty the account later.

Online frauds are a major concern, too. Crooks posing as customer-care agents of banks often fool people into revealing confidential data. Some fraudsters have even set up fake websites, which come up during internet search. People are then targeted when they call the ‘customer care’ numbers mentioned on these websites.

Delhi Police’s Cyber Prevention Awareness and Detection (CyPAD) centre is, meanwhile, grappling with a number of issues, including lack of trained manpower to deal with the criminals who appear to be one up on them at every step.


Dec 11, 2019 Times of India

ATM and card frauds, 2019
From: Dec 11, 2019 Times of India

Instances of unlawful transactions involving internet banking, ATMs and credit and debit cards shot up over 50% to cross 52,000 in 2018-19, with Delhi being the ATM fraud capital accounting for nearly 27% of the reported cases of “siphoning off of cash”.

In response to questions, the government told Parliament the amount involved in such incidents, however, has come down.

The numbers of ATM frauds in public sector banks were, however, more revealing. While State Bank of India, with over 58,000 ATMs across India at the end of March 2019, accounted for over 25% of the over 2 lakh cash dispensers, one in five frauds were reported at its ATMs.

But second placed IDBI Bank, which had 3,700 ATMs according to its website, saw close to 1,800 frauds being reported. So, its share of ATM population was estimated at 1.8% but when it came to reported frauds, it accounted for 15% of the pie between April 2017 and March 2019.

While the government did not reveal the reasons for the frauds, bankers said India is seeing increase in number of such attempts as it tries to scale up its infrastructure to shield itself.

“We are seeing a massive influx of fraudsters from foreign countries as the infrastructure in Europe has been upgraded making life difficult for them,” said a banker. A banker said cameras are being deployed above the ATM keypad and other techniques, often using malware, are being used by skimmers and fraudsters to siphon off funds using net banking.

RBI has issued detailed norms to improve the infrastructure through introduction of anti-skimming, white-listing solutions and software upgrades apart from asking banks to issue only chip- and PINbased cards. But banks are seen to be slow in responding to the challenges, including in upgrading the ATM network.

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