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Reaching out: is it slowing down? Why any time money? Smart banking in smart cities Greet Lakshmi the banking robot Aadhaar, niraadhaar and banking Rationalised Growing volume of stressed assets… Banking overhauling or reorganisation? How okay are new banks? Perhaps small is more beautiful than big! Reaching the Unreached… Monetary policy continues to adopt dis-inflationary path Just 660 days! Target over-ambitious... Ferrying digital banking to Lakshadweep Cut in repo rate – lower than expected Nothing much can happen…. Cradle of banks to a smart city... Bottomlines shrink, bad loans rise... Small is ‘more’ beautiful Grows Bigger All that glitters is not gold... Managing NPAs... A new development bank rising in the east… A bank for women, by women Hesitancy in announcing year-end results A development bank for BRICS Fund healthcare clinics in villages... Why priority status? Payment banks have arrived Thirty more cities seek to become SMART Big bank merger, bigger expectations Lacklustre credit expansion United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu Needed a Banking Atlas Emerging crisis What is the priority – mergers or NPA reduction? Mega merger is on Indian customers are tech savvy Another route for achieving financial inclusion New capitals of Migrant banks Merger mania haunts banks Well-lived... Small finance payment banks... Holy or unholy? Banking on Risk The paradox: clamour for the Goliath and David Growing gainfully Too big to fail and too small to sail Cautious and considerate How ‘secure’ are the secured loans? Small finance banks offer high interest rates Capital base of regional rural banks raised Banking in Telangana Bank deposits account for 46.3 per cent of household savings One down in private sector Good, bad and ugly Drop in SLR- sparing lendable resources Targets continue to be ad hoc It’s a war on black money, support it. Ernakulam excels... From lazy banking to easy banking Financial inclusion vs unclaimed deposits Anytime banking to anywhere banking LVB- A supermarket of financial services New bank licences, at last... Who is the real beneficiary? The collaboration suite of cyber criminals Stage set for Indian ‘avatar’ of foreign banks Insatiable appetite for credit Drastic decline in asset quality Two banks: their jubilees and performances Governance in Reverse Gear?
 
Why any time money?
ATMs have become quite popular with bank customers, 24x7, and 365 days a year. It’s the easiest way to draw money. Thanks to automation, you don’t have to visit the brick and mortar branch. In fact, banks themselves are discouraging footfalls. Only in exceptional cases, to take care of emergencies, some ATMs could be kept open for service, throughout the night. They could be attached to hospitals, railway stations, busy bus stands, airports and those located close to police stations.

With the increase  in the number of ATMs, the number of fraudulent withdrawals and related crimes has increased alarmingly. Mugging the lonely motorists and forcibly using their ATM cards to withdraw money have become common. Attempts were made, in some cases successfully, to break-open the ATMs and loot the cash. The latest unfortunate event is the ghastly assault of a lady customer inside the ATM booth in broad daylight in upmarket Bengaluru. This has raised many questions relating to law and order and about the relevance of night-long banking  service.

 

Concern of the government

The immediate reaction of the state government in Karnataka was to direct the banks to arrange for security guards at all ATMs round-the-clock or else close down the ATMs. While the state’s concern is genuine, it has huge cost implications, without any direct benefit in terms of business expansion. But banks cannot shirk the responsibility of providing customer service.

 

Banks’ predicament:

The banking sector has 114,014 ATMs operating across India as on March 2013. Out of them 56,760 are on-site ATMs, located in branch premises. Another 58,254 ATMs are installed in various places away from the branches. There is clustering of them in many streets even in smaller towns. Offering ATM services is no longer a cheaper proposition for banks. Banks are now directed to install ATMs in all village panchayats as a part of programmes aimed at total financial inclusion. A cost-benefit analysis of the operation of ATMs would reveal that many of them are un-remunerative. And if security guards were posted to rural ATMs, there would be a further drain on banks’ revenues.

 

Why the clamour for 24 x7 service?

A couple of years back, one bank in Mumbai announced 24 hour banking service in certain branches. It turned out to be more of a publicity gimmick. No corporate client, even if he spends sleepless nights at home or in five star hotels when on tour, would care to visit the night branch to discuss his credit proposal. Quietly the bank withdrew this facility, as there were no takers.

It is difficult to visualise people who require the service of ATM at mid-night and beyond:  How often do they visit ATMs at night? Are they smugglers, who cannot find time during daytime? Do the banks expect the tired taxi-drivers or the harassed footpath hawkers to walk into ATMs at late night to deposit their monthly interest installments? Or do they expect the yuppies to peep in, before driving home from the pubs? Normally there could be no transactions after 10 pm in most of the ATMs. Or even if there were, they may be too small in number to justify to the ATM to be operational throughout the night. Instead of keeping a security guard awake all night, with the lights on, besides the AC, it is advisable to close ATMs at 10 pm. They can start functioning from 6 am to help those in need of cash before the day begins.

Only in exceptional cases, to take care of emergencies, some ATMs could be kept open for service, throughout the night. They could be attached to hospitals, railway stations, busy bus stands, airports and those located close to police stations. Through mutual consent, banks can restrict the number of such 24x7 ATMs in each city. If necessary, they can relocate their ATMs to avoid duplication. They can also adopt a system of rotation in assigning different banks the responsibility of keeping their ATMs in such locations, on a quarterly basis.

 

ATMs in rural areas

Banks have been directed to install ATMs in all rural branches primarily to ensure that the rural labourers get their wages under MGNREGA promptly. Such transactions may take place only once or twice a month. The ATMs are likely to remain unused for longer times. They would be redundant outlets after sunset. At best, they can function from dawn to dusk only. With rural operations staying un-remunerative, the provision of security will only up the cost. Banks will have no choice but to pass it on to the customer.

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