Banks take to the shrinking cash machine

Automated teller machines (ATMs) made their human predecessor superfluous.

Micro ATMs may just return the compliment to the big cash dispensers.

Technology is helping banks reduce the size of such machines, and their costs even as they reach out to more customers.

For all practical purposes, the micro-ATM is a normal ATM — at a lower cost.

Not surprisingly, banks find them a handy tool to achieve financial inclusion targets.

These machines can be in the form of hand-held devices or a smaller version of the standard cash spewer.

While most banks have already deployed hand-held devices that are used by business correspondents, they also plan to use the smaller dispenses, which can also be accessed with biometric smart cards and mobile phones.

Such machines may soon be found at public places.
For instance, Union Bank of India is working with private partners like Reliance Fresh and Bharat Petroleum Corporation (BPCL), who will install these ATMs at their outlets across India. “If we install a micro-ATM at public spots such as a mall or petrol pump, customers will be empowered,” said MV Nair, chairman and managing director of Union Bank of India.

Technology provider Financial Information Network & Operations Ltd (Fino) currently has such ATMs installed across 260 districts servicing 15 million customers.

“Around 3.5 million transactions of Rs 150 crore worth are carried out per month through them,” said Rishi Gupta, chief financial officer, Fino. Most of these transactions are related to National Rural Employment Guarantee Act (Nrega) payments, savings accounts and remittances.

Bank of India has currently deployed 500 hand-held devices with their business correspondents across Maharashtra, Uttar Pradesh, Jharkhand, Madhya Pradesh and Orissa under the Lead Banking Scheme. “We plan to recruit 15,000 business correspondents by the next fiscal. Each of them will either be equipped with micro-ATMs or will have access through mobiles,” said N C Khulbe, general manager, Bank of India.

Central Bank of India has 350 hand-held devices currently in operation. “These hand-held devices cost us between Rs 15,000 to Rs 30,000 depending on the model,” said Umesh Kumar Singh, deputy general manager, Central Bank of India.

The Reserve Bank of India had dedicated the 2009-10 towards achieving financial inclusion to mark its platinum jubilee.

The central bank had asked all banks to submit their financial inclusion plans targeting unbanked areas in India to be covered by March 2012. “Since the RBI has put a thrust on financial inclusion, banks are showing more and more interest in branchless banking model,” said Gupta.

As a part of the ambitious Unique Identity (UID) card project, a micro-ATM will be a payment platform that would make use of mobile technology and the customers’ UID will serve the ‘know your customer’ (KYC) norms required by the bank to open an account.