PSU banks consortium begins work on ordering ATMs

A consortium of public sector banks has begun putting out orders for supply of automated teller machines (ATMs)/cash dispensers.

Hitherto, these banks placed orders for purchase of ATMs on an individual basis.

About 40,000 ATMs are expected to be ordered by this consortium, with different banks assuming lead bank responsibility for the process, across different geographies in the country.

The installation, maintenance and management of services of such ATMs and cash dispensers will be done through a totally outsourced model.

In Madhya Pradesh

State Bank of India on Sunday has notified an all-India tender for installation of 3,893 cash dispersers in Madhya Pradesh.

SBI has called for the request for proposal on behalf of a consortium of banks, including itself, United Commercial Bank, Allahabad Bank and United Bank of India.

The rollout of the cash dispensers would be in urban, semi-urban and rural locations according to the requirements of each bank, the notification said.

The requirements are spread over two years - 2012-13 and 2013-14.

SBI alone will need 1,980 ATMs in this area (MP) during the two years.

VENDOR SPECIFICATIONS

The contract will cover provision of services for seven years.

Bidders who wish to participate in the request for proposal process (RFP) should have a minimum annual turnover of Rs 20 crore from ATM operations in India.

In off-site locations (sites away from the branch), vendors can set up ATMs in any site of their choice while sticking to the broad area specifications given by banks.

The specifications include a requirement for a disaster recovery centre and business continuity plans.

USER-FRIENDLY

The minimum availability of an ATM (uptime) for use by customers in a month has been mandated at 97 per cent in urban areas and 95 per cent in semi-urban and rural areas.

Penalties have also been prescribed for those vendors who fail to maintain the mandatory availability of ATMs services.

GAIN FOR BANKS

While banks are tight-lipped about the cost-advantage they have in outsourced ATMs model as against own ATMs, experts agree that reduction in ATM transactions-related costs has been a focus area of banks.

This happened particularly after the regulator forced banks to share their network - enabling customers of any bank to use any other bank's ATM.

Banks bear the fees charged for their customers using other banks' ATMs – and, therefore, are a shade prickly when this happens.

ICICI Bank, for instance, has stated sending a SMS immediately after any its customers uses a non-ICIC bank ATMs.

It promptly SMSes that it has 7,300 of its own ATMs !

It also offers information on the nearest ATM location through the registered mobile of a customer.

As of now, there are about 75,000 ATMS in the country out of which over 26,000 belong to the SBI group.

nagsridhu@thehindu.co.in