Monday, January 6, 2014

Bank Charge For ATM Use , Unable to Afford Security Cost--This Is Consequence Of Unplanned & Unscientific Expansion Policy

Banks ask RBI to take a call on ATM fee rise-Business Standard

Bankers have sought an increase in the fee of Rs 15 to Rs 18 for all transactions, including non-cash transactions like balance enquiry. A working group set up to look into this had suggested a rise i
Banks have asked the Reserve Bank of India (RBI) to take a call on their demand for a rise in user charges for automated teller machine (ATM) transactions.

The Indian Banks’ Association (IBA) wants RBI to put a cap on free transactions at ATMs. At present, a customer can carry out only five free transactions at ATMs (other than his bank’s) a month and each transaction above this is charged Rs 15. But he can transact any number of times on ATMs of the bank where he has an account. The banks have told RBI all transactions above five should be charged even if the customer uses own his bank’s ATMs.

Bankers have sought an increase in the fee of Rs 15 to Rs 18 for all transactions, including non-cash transactions like balance enquiry.

A working group set up to look into this had suggested a rise in charges.

“We have referred the matter to RBI. Banks want to increase the fee to Rs 18 after five free transactions, including own-bank ATMs,” said Mohan Tanksale, chief executive, IBA.

"Even now, five free transactions are enough to meet the withdrawal requirements of most of the account holders. For balance enquiries, SMS is a more convenient option," said Tanksale.

Banks have cited an increase in maintenance cost as the reason for the demand. With a sharp rise in the number of ATMs in the last few years, which is about 140,000 now in the country, per ATM transactions have fallen below 100 a day. Ideally, an ATM should get at least 200 hits daily.

In a statement, IBA has also said all bank branches will have on-site ATMs by March-end this year.

This follows a communication from the finance ministry, which had called upon public sector banks to open ATMs in every branch in rural areas. Banks are, however, sceptical about the viability of ATMs in such locations.

Separately, IBA officials also said they will be shortly sending their official views on RBI’s discussion paper of early detection and resolution of stressed assets.

Some banks have asked for more time for firming up corrective action plan for a stressed loan in 30 days. In addition, banks also want to defer the accelerated provisioning norm – which will be imposed if banks fail to implement measures to address stress, till the economic activity picks up.

Regarding the issue of finance ministry’s advice to public sector banks for entering into insurance broking, IBA officials said, individual bank boards will take a call in thus issue. “Banks having existing agency arrangements or joint ventures in insurance business will have to be carefully evaluate the implications before taking a call on broking business,” IBA said.

Bank Charge For ATM Use , Unable to Afford Security Cost--This Is Consequence Of Unplanned & Mad Expansion Policy. Rapid Expansion of ATM and Bank's Branches will open Pandora's Box if not handled cautiously. Bank planned to save manpower cost by rapid expnsion of ATM network but now it is going to prove costlier and danderous too.-Read also my two blogs written a few days ago on this issue. Links are given here in below

http://importantbankingnews.blogspot.in/2013/11/security-at-atm-or-security-of-all.html

http://importantbankingnews.blogspot.in/2013/11/provide-security-at-atm-or-shut-down.html


http://importantbankingnews.blogspot.in/2013/12/it-is-really-perturbing-to-note-that.html

‘Manned ATMs to cost banks R4,000 cr a month’-Indian Express


Banks will incur a monthly outgo of Rs 4,000 crore due to additional security requirements at ATMs following the recent Bangalore incident and the only alternative for making operations viable is raising user charges, Indian Banks Association (IBA) said on Monday.

"Every ATM will need an additional Rs 40,000 a month on security. There are over 1 lakh ATMs which will need the upgrade, so the monthly outgo for the industry will increase by at least Rs 4,000 crore," IBA chief executive MV Tanksale told reporters here. Some of the 1.4 lakh ATMs are already manned.
IBA is the umbrella body of lenders.

He said banks have already resorted to activities like shutting some ATMs in odd-hours. However, when asked if it has also sought some decision from RBI to charge for every transaction, Tanksale said it would be best to leave it to individual bank.

A woman employee of Corporation Bank in Bangalore was brutally attacked inside an ATM kiosk by an unidentified man with a machete in November last year.

Following the incident, all banks were asked to deploy armed security guards outside all 1.40 lakh ATMs round-the-clock.

When asked if this will prove to be detrimental factor for the banks' ATM expansion — they plan to increase the total number of ATMs to 2 lakh in the next six months —Tanksale replied in the negative saying all banks are committed to expanding the ATM network.

"More and more people need to use ATMs as we need an average footfall of about 200 per ATM per day," he said.

Meanwhile, Tanksale said the IBA managing committee has zeroed in on a special branding package design for the 'talking ATMs' to be used by the visually challenged.
Free ATM transactions likely to be limited to five/month

IBA to ensure security at ATMs-The Hindu-06.01.2014

To increase reach into unbanked areas, banks have started installing onsite and offsite ATMs

Indian Banks’ Association (IBA), on Monday, appealed to all bank customers to use ATMs for cash withdrawals and said that banks were taking adequate measures to ramp up security of their ATMs.

“This will not only help in uncluttering the bank branches but will also go a long way in making the ATMs viable for the banks,” said M. V. Tanksale, Chief Executive, IBA, here, while addressing a press conference.

He said that banks were using a mix of physical (guards) and electronic (surveillance system), and in some cases, they were shutting down the ATMs during the night, the number of operations being very low. However, Mr. Tanksale said, “it will be ensured that ATMs at all important public places like hospitals and railway stations will be available 24x7.”

To increase reach into unbanked areas, banks have started installing onsite and offsite ATMs. It is expected that by March 2014, all bank branches will have onsite ATMs in place.

Mr. Tanksale said that IBA was constantly in discussion with the lead banks, nodal officers of their link banks, and ATM suppliers and vendors to identify and sort out operational issues to ensure that ATM roll-out took place smoothly.
Training programme


Further, IBA has approved a training programme of IIBF, enabling Business Correspondents (BCs) and Banking Facilitators (BFs) to function as Direct Recovery Agents (DRAs). “It is expected that a large number of women SHG (self-help group) members will be trained this way and this will improve recovery of rural loans”.

IBA also said that with economic growth slowing, banks had been facing challenges in maintaining asset quality. It has set up a working group of senior executives from banks to study the implications of the RBI discussion paper on framework for revitalising distressed assets.

Mr. Tanksale also said that the sectoral committee on public sector banks had been revived and would meet regularly to resolve the important issues with regard to asset quality, capital requirement and compliance of risk management practices.

Further, he said that an enhancement of the ex-gratia amount being paid to the pre-1986 retirees recommended by IBA had been approved by the government and the payments would go up approximately Rs.500 a month for them.

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