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ATM Banking in India: Problemsand Prospects

Presented By:Ashish Saini

Dr. Ravindra Kumar Saini

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INTRODUCTION

ATM (Automated Teller Machine) or a cash

point is a computerized machine.

ATMs plays a vital role in facilitating the bankingservices to banks as well as customers.

ATM is the back bone of retail banking sector.

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The idea of ATM machine developed simultaneous inJapan, Sweden, U.K and U.S.A.

The first cash dispenser machine developed byLuther George Simjian in Feb.1963, whichknown as Bankograph.

The second dispenser machine developed by John

Shepherd Barron which matched PIN(PersonalIdentification Number).

This machine known as DACS.

The first modern ATM use in Dec. 1972 in UK.TheIBM 2984 designed on the request ofLloyds Bank.

(Contd.)

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This design was similar in function of todays

machines.

HSBC-Honkong and Shanghai Banking

Corporation introduce the first ATM in India

in 1987.

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Table:1 Growth of ATMs in India

Year Number of ATM2005-06 21,1102006-07 25,2472007-08 34,5472008-09 43,6512009-10 57,7652010-11 76,871

Source :-Cyber Media Estimates Research in Banking 2010

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Growth of ATM in India

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

Number of ATM

Source:Report on Trend and Progress of Banking in India 2010-11

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Growth of ATMs in the World

Year Number of ATM2007 1,780,1892008 1,912,1782009 2,029,2242010 2,154,9702011 2,235,8352012 2,407,7752013 2,609,1602014 2,848,190

Source: Global ATM Market and Forecasts to 2011 (Retail Banking Research)

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Growth of ATMs World wide

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

2007 2008 2009 2010 2011 2012 2013 2014

Number of ATM

Source: Global ATM Market and Forecasts to 2014 (Retail Banking Research)

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Functions of ATM

The concept of ATM is 24 7 365.

Flexibility of using ATM of other banks i.e. we

can make transaction from any ATM while our

account not in same bank.

Can recharge their mobile phone prepaid

connection.

Pay the bills.

Money transfer from one account to another one.

(contd.)

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Check the balance of account at any time.

Register their mobile number for account details.Deposit the cheques in account.

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Problems with ATMs

Problems of ATMs categories in two category :

1) Problem faced by Customers:

They didnt receive cash while the is accountdebited.

Wrong insert the ATM card. This problem is more

common with new ATM users who are notfamiliar with ATM machine.

They didnt receive slip of account balance.

(contd.)

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Money transfer problem.

Some time money stuck in machine at the time oftransaction.

Some time machine didnt accept ATM cards.

Time out problem when the customer late for anystep of processing.

Customer face the problem when the process of

bank is change. When cash not available.

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2) Problem faced by Banks :

Theft money from ATMs. Burglary of ATMs (including theft of entire

ATMs).

System problem (including server down). System failure (system crash or the software not

work properly).

Hack the Banks site which affect wholebanking system.

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Factor For Growth of ATM

Make transaction any time and more than one

time in a day.

Take less time to make a transaction than a teller

in banks.

Easy to use for people.

Much reliable i.e. no body can access your

account without your permission.

(contd.)

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It reduce the bank s work load.

Accurate transaction.

Can make payment for purchase anything.

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Cost of Transaction with various mode of

Banking

Mode Cost Per Transaction (in Rs.)Teller System 1

ATM

0.45

Phone 0.45Debit Card 0.2

Internet 0.1Source: IBA Bulletin special issue 2005

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0

0.2

0.4

0.6

0.8

1

1.2

teller ATM Phone Debit Internet

Cost in Rupees

Source: IBA Bulletin special issue 2005

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Conclusion

As the banking sector computerize day to day, and

ATM have became a part of modern bankingsystem.

The banks in developing country adopt ATMs to

improve their own internal process and also forincrease facilities and services of their customers.

Now customers become aware about this machine.

The growth of ATM rapidly high at the world widelevel also in India.

This technology is simple, safe and secure and

people feel satisfaction to use this.

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Thank you