Executive Summery

ATM means Automated Teller Machine. Most historians

agree that Barclays in the London was the first to deploy an ATM
in 1967. It wasnt until the mid to late 1980s that ATMs gained
wide acceptance. Automated teller machine is those machines,
which are used within, or outside the bank premises for cash
payment and other transaction related services without intervention
of human bring. ATM have progressed from being merely cash
dispensers to provide facilities for deposit balance & reporting &
inter account transaction
The structure of ATM as follow (1) Processor (2) Consumer
interface panel (3) card reader (4) Printer (5) dispenser (6)
Depositor
There are over 1.2 million ATMs installed worldwide.
Approximately every 5 minutes a new ATM is installed. The ATM
is one of the most important technological inventions of the second
half of the twentieth century, helping to crate the 24 X 7 all hours
access to their own-banked cash near to where they live, work and
shop.
According to recent data from the Dove Consulting on ATM
terminal deployment, financial institutions lose an average of $ 242
per month on each of their off-premise ATMs. In fact, between
2001 and 2003, revenues generated by off premise ATMs fell by
11%. This report demonstrates the popularity the Full services
outsource model has gained among small to mid-size bank
deployers. According to the report, 7% of large banks and 13% of
other banks use service model while 13% of large credit unions and
18% of other credit union employ this method as well.
Despite the challenges ATM management poses to banks and
credit unions, ATM networks are proven to help attract new
customers and promote self-service banking and convenience.
If you should ever be forced by a robber to withdraw money
from an ATM machine, you can notify the police by entering Pin #
in reverse.
Cash machine crime has risen despite leading banks
investing millions of pounds in anti-skimming technology.

Reserve Bank Of Indias Guideline for issue of ATM-cumDebit Cards by UCBs. Banks which are authorized to install on-site
/ off- site ATMs, as per the policy in force, may introduce ATMcum- Debit cards with the approval of their Board keeping in view
the guidelines as given in Annex I. A report on the operations of
these cards issued by banks should be forwarded to the RBI,
Department of payment and Settlement System (DPSS) with a
copy to the Regional office concerned of RBI on a half yearly
basis, say at the end of March & September every year,
incorporating information as indicated in Annex II.
Benefits of Biometric supported ATMs Provide strong
authentication. Hidden costs of ATM card management like card
personalization, delivery, management, re issuance, PIN
generation, help-desk, and re- issuance can be avoided. Ideal for
Indian rural masses.

Introduction of ATM
The growth of technology has changed the payment System
world over during the past two decades. More and more
innovations are being introduced in both cash payment system and
non-cash payment systems. Cash in the form of notes and coin was
the principal method of payment system before the introduction of
Banking paper instruments such as Cheques and cash Transfer
now have become a part of the payment system with the popularity
of banking. Electronic devices are making the job of cash payment
as well as non-cash payments easy and efficient.
ATM mean Automated teller machine, which is used within
or outside the bank premises for cash payments and other
transaction, related services without intervention of human being.
ATM is installed in different forms as wall unit, window unit or
lobby unit depending upon the location and the need of target
customers.
The introduction of Automated teller Machine and plastic
card has given the banking customers the facility of round the
clock banking. In this Unit, we will discuss about the various types
of teller machines prevalent in the banking industry and how they
are instrumental in replacing our traditional payment systems.
Some ATMs allow withdrawal funded by clerical staff in
retail merchant location. The clerical staff are not considered bank
teller. Many ATMs also allow people to deposit cash or cheques,
transfer money between their bank accounts, top up their mobile
phones pre-paid accounts or even buy postage stamps

History of ATM
The history of the ATM often is open for debate, since the cash
dispenser's development occurred long before the machine was put
into use. Most historians agree that Barclay's in the London was the
first to deploy an ATM in 1967. It wasn't until the mid to late 1980s
that ATMs gained wide acceptance.
After MasterCard and Visa lifted their surcharge ban in 1996, the
off-premises market in the United States exploded. The United
States now has the largest ATM market, with somewhere between
420,000 and 450,000 ATMs, in the world. Today, worldwide ATM
deployment is estimated to be 1.5 million.
Teller machine are those machine, which are used within, or
outside the bank premises for cash payment and other transaction
related services without intervention of human being. Basically
there are two type of teller machine (1) Automatic Teller Machines
(ATMs) and (2) Bank Teller Machine (BTMs)
1) Automated Teller Machines (ATMs)
Significant advantage can be availed from computerizing day- today banking operations originate to the cash counter in the banks.
Before considering the aspects of computerizing these operations,
we should look at what operations are performed at these counters.

HOW DO THE ATM WORKS:

Start
Chq.wdl
Presented for
Payment
No
Return the
Cheque./Wdl.

Stop

Is Customer
Has Account
With Bank?
Yes

No

Return the
Cheque./Wdl.

Stop

Return the
Cheque./Wdl.

Stop

Is Sufficient
Bal. Available
To pass chq?
No
Is Signature
O.K.?

Debit the A/c.

And update the
Pass book
Count Out
Cash

Pass the Cash

& Passbook
to Customer
Update branch
A/c and Cash
Balance

Stop
Flow chart 1: Manual payment system at Teller counter

Step in withdrawing money

Lets see what typically happens when a customer wishes to
withdraw money from the bank. Assuming the customer has a
savings account with the bank with bearer cheque facility, the
customer has two option to withdraw money: with a cheque
payable to self or use a withdrawal slip along with the passbook.
The following operations have to be performed after presentation
of cheque / withdrawal slip by the customer at the counter for
withdrawal of cash.
1) To check whether the customer has an account with the
bank.
2) To check whether sufficient balance are available in the
account to permit withdrawal of the amount requested by the
customer.
3) To verify the customers signature with the specimen
signature stored with the bank.
4) To update the customer account with the bank and also
passbook by reducing the closing balance.
5) To count out the cash.
6) To pass the cash to the customer.
7) To update the branch account to show simultaneous decrease
in customer deposits and in cash balance.
From the customer point of view, the above process is
cumbersome to the extent that he can obtain cash only during
banking hours. Also, since the actual process takes some time to
complete the formalities, he may have to wait in a queue. From the
banks point of view, when the process is done without any
computerization, a considerable number of man-hours are required
to complete the process. In fact the significant part of the time of
banking personnel is spent in the activity of counting of cash,
verifying the signature, updating the ledger and passbook etc.
These are the reason why electronic payment systems have been
adopted.

The growth of technology has changed the payment systems world

over during past decades. The introduction of Automatic Teller
machines has given facility to the bank customers for banking
beyond the banking hours. An ATM is a device located on or off
the banks premises to receive and dispense cash round the clock.
Customers can also use ATMs for depositing cash, cheques,
obtaining balance, obtaining statement of last few transactions in
his account, requesting cheque books, payment of card bills and for
transferring funds from one account to another.
The customer is issued a plastic card in this mane. This card is
magnetically coded, so that the ATM can identify the customer.
When the customer wants to use the ATM, he inserts the the card
into the slot at the ATM window. Once the card is recognized, the
video terminal of the ATM displays the message Type your
identification number. This is a unique Personal Identification
(PIN) which is provided to him at the time of opening the account
and is normally known only to him. This number ensure against
other withdrawing through stolen cards. The customers type this
number on the keyboard at the ATM window. The computer checks
this number and establishes the authenticity of the customer.
The ATM then displays the message enter the transaction
or the amount to be withdrawn. When the customer gives the
instructions through the keyboard the VDU displays your
transaction is being processed. Please wait. If cash is to be
withdrawn and there is sufficient balance, the cash output slot
pushes out the amount and also a printed statement of the
transaction, and even the present balance in certain cases. It the
customer want to deposit cash or cheques etc, the ATM releases the
cover for this purpose. Other transactions are also put through in a
similar manner. At the end of the transaction the ATM cover closes
and the machine ejects the customers card.
There are two types of ATMs:
1} Exterior ATMs and
2} Interior ATMs.

Exterior ATMs are located in various places like shopping

centers, airports, railway stations with or without drive in facility,
while the interior ATMs are located within the bank premises.
ATMs that are directly interactive with the Banks computer are
known as on-line ATMs and the others are known as off-line
ATMs. On-line ATMs require the support of effective
telecommunication facility. In some foreign Banks ATMs the
conversion of currency is also possible. Interactive and voice
recognizer ATMs are also installed to facilitate the customers to
interface in multi-language.

The structure of ATMs

The following modules are the part of any standard ATM.

1.
2.
3.
4.
5.
6.

Processor
Consumer Interface Panel
Card Reader
Printers
Dispenser
Depositor.

1. Processor
The processor is the main brain behind an ATM. All the necessary
interfaces with the various ATM modules are handled b the
processor. It receives commands through the Consumer interface
Panel (CIP) and decides on further action\processing. If the ATM is
in off-line mode, the processor will authorize the transaction based
on the balance available on the card, while if it is on-line mode,
the authorization will be based on the validation check carried out
by ATM by interacting with the central computer.
2. Consumer Interface Panel
Consumer interface panel consists of set of devices provided to the
user/consumer of ATM service. It consists of (A) key pad, (b)
display, (c) recess for card, (d) printing unit and (e) envelopes. The
CIP guides the consumer through the transaction and allows the
consumer to enter the data. The display unit is a high resolution
monitor which displays messages/ pictures. The display is visible
only for the consumer and not to the person nearby. Consumer
keypad is recessed for privacy and it has 10 numeric keys and a
cancel key.
3. Card Reader
Motorised card reader is provided on the ATMs. The magnetic
track on the cards, as soon as inserted by the consumer, is read by
the card reader. The consumer can take back the card after
completing the transactions. There is a retained card bin provided
inside the ATM, where the retain cards and the cards left behind by
the consumer by mistake are deposited.

10

4. Printers
There are two printers provided in the ATMs. One printer is for the
consumer and the other one is journal printer. Both are not visible
to the consumer. After the transaction is over, the purpose and
consumer picks it up. The journal printer provides an audit trail of
all completed transactions. The transaction data is also available in
electronic media.
5.Dispenser
The currency notes are stored in cassettes in the Dispenser. The
dispenser picks the currency and delivers the same to the consumer
through slot provided in the front panel. The currency dispensers
uses either friction pick or vacuum pick technology depending
upon the technology available with the ATM.
6). Depositor
The depositor accepts envelopes with cash or other documents and
provides security for deposited material. The deposit is made
through a separate slot provided for the purpose and the consumer
through the keypad enters the details of deposit. ATM provides the
envelopes meant for the deposits with the envelope dispenser.

11

Alternative uses of ATM

ATM Project
The Banks ATM network includes 5479 ATMs in India, which is
the largest ATM network in the country. The Bank continues to
expand this network rapidly. Customers can transact free of cost at
the ATMs of the State Bank Group.
The agreement with VISA and Master Card International for
acquiring ATM transactions has resulted in another revenue
generation stream.
Debit Card Population
The card base of State Bank Group has grown from 7.77m in
September 04 to 12.43m in March 05 and 16.32m in September 05.
Out of total card base State Bank of India has major share of
12.89m cards and remaining 3.43m cards of Associate Banks. State
Bank Debit Card with affiliation to Master Card is the largest
Maestro debit card issued by any Bank in South Asia.
Card Usage
With our bilateral sharing arrangement with UTI Bank, HDFC
Bank, Indian Bank, Andhra Bank, Punjab National Bank and
Corporation Bank, our customers have access to the largest reach
and convenience of Anywhere Anytime banking at over 10,200
ATMs.While access to State Bank ATMs is free, nominal charges
are applicable on the use of other banks ATMs. Recently, UCO
Bank Canara Bank and IndusInd Bank have signed MOU for
bilateral sharing arrangements with State Bank ATM Net Work.
State Bank ATM cum Debit cards are also acceptable at more than
1,23,000 Points of Sale / Merchant Establishments, which display
Maestro logo.
The Bank is making rapid progress in migrating customers from
teller counters. The average hit rate has increased from 189 in
March 2005 to 212 in September 2005.

12

Roll out of ATM Prototype

Rollout of ATM Prototype is an initiative launched in this direction,
where cards are personalized for all eligible customers and
delivered to them during their visit to branch.To help them in
acquainting themselves with the ATM usage dedicated support
from ATM Dost is provided.ATM Dost is marketing representative
of our Bank, selected from the branch staff who acts as friend and
guide to customers in delivery of cards and educates them about its
usage and advantages.The ATM usage has been increasing
continuously and average of 1 mn txns happen every day on our
network.
During the first half year of current financial year 2005-06,
Prototype has been rolled out to new 514 branches in 11
Circles.
Another 500 branches will be rolling out prototype by next
quarter 2005.
International Debit Card
The Card population of International Debit Card as on March 05
was 13470. The number has increased to 16451 as on September
2005.
24 x 7 Support through Call Center
Effective from 15th August 2005, Call Center operations have been
shifted to M-phases and are functional from Bangalore.Call Center
is now accessible from anywhere in the country. Facility is
extended to Associate Banks customers also.Call Center is being
upgraded to Customer Care Center with added services like Hot
Listing of cards, request for re-generation of pins and complaint
redressal machinery.

Before You Use an ATM

13

While ATM's have added some convenience to our lives, a few

risks have also popped up. ATM's give criminals another
opportunity to get at your money, and you should take steps to
reduce your risk. Most of us can stay out of trouble with simple
common sense, but you should periodically review some proven
tactics. Follow these seven steps, and you'll improve your odds
against the scamsters.
Look Around Before You Approach
Take a quick look at your surroundings. See if anybody or anything
looks suspicious. Is anybody watching you or standing too close?
Use ATM's That You're Familiar With
If you know an area well and have used an ATM before, you can
expect similar results. In other words, your chances of getting
robbed at a 'familiar' ATM are less than your chances of getting
robbed at a 'new' ATM. There are a variety of reasons for this, but
the point is that your odds are a lot better with a trusted source.
Look Over the Machine Before Inserting Your Card
If you see something that looks unfamiliar on the machine, it could
be part of an ATM scam. (External readers) and hidden cameras
can be used to compromise a bank account. Bottom line: if it looks
funny, look for another ATM.
Lock Your Doors and Secure Windows at Automobile ATM's
We've all heard the stories about carjacking. Think how much more
attractive you are as a target with cash-in-hand. When your car is
stopped and you're picking up cash, just take the half-second
required to lock the doors and keep crooks out.

Have Your Card Ready While Approaching the ATM

14

If you're quick, your chances are better. On the other hand, you're
exposing yourself unnecessarily if you stand around the ATM
digging through your wallet or purse for that special card. Get it
out before you leave your car or as you're approaching the ATM
and get your transaction started as soon as possible.
Use ATM's that are Well Lit and Safe
Have you ever had to swipe your ATM (or Credit/Debit) card to get
into an ATM booth after hours? One of the reasons is that only
somebody with a valid card can get through the door. This makes it
less likely that and undesirable will approach you just as your cash
is coming out. Obviously this is not foolproof -- a crook can steal
somebody's card and use it immediately.
Get Cash Out of Sight
This is pretty obvious, but some people need to be more conscious.
After you get your cash, get it out of sight. Whether it's a lot of
money or a little, cash can be tempting when it's out in the open.

Fraud of ATM
Cash machine fraud up, say banks
Cash machine crime has risen despite leading
banks investing millions of pounds in anti-

15

The banking industry says new figures, to be published next week, will show
ATM fraud is on the increase.

One in four ATMs have now been fitted with anti-skimming equipment
Criminals - many from organised gangs - stole 65m last year, by using skimming
devices that read information from the magnetic strip on the back of a card.
Deputy Information Commissioner David Smith said banks should be doing more
to protect customer information.
Mr Smith added: "Banks really do need to concentrate their attention on customer
security - it's about protecting information and the problems that customers can
face if their information gets into the wrong hands. "It's not just about protecting
the bottom line, the profits of the banking industry."
Although only one in four machines has been fitted with the new anti-skimming
equipment so far, the banking industry said it will have a "dramatic effect on
reducing cash machine fraud".
The industry also said it had witnessed an increase in cash point crime because the
new chip-and-pin system has made it harder for fraudsters to use stolen or cloned
cards in shops.
Chip-and-pin cards aim to cut fraud by including a smart chip, which can store
more information than the usual magnetic strips, and also by having users verify
transactions by keying in a pin number rather than signing a receipt.
Miniature cameras, which can record pin numbers, are also among the devices
used by fraudsters to steal cash from ATMS. Over the past two years card issuers
have been busy replacing all credit and debit cards in the UK.
Sandra Quinn, from the Association of Payment and Clearing Services (APACS)
which represents the companies which handle payments, said: "As you cut off one
route for fraudsters they exploit another.
"So as we made sure that all shops had chip-and-pin equipment, fraudsters weren't
able to use counterfeit cards there, so they doubled their efforts at cash machines.

16

ATM Security Information

PIN NUMBER REVERSAL
If you should ever be forced by a robber to withdraw money from
an ATM machine, you can notify the police by entering your Pin #
in reverse.

17

For example if your pin number is 1234 then you would put in
4321. The ATM recognizes that your pin number is backwards
from the ATM card you placed in the machine. The machine will
still give you the money you requested, but unknown to the robber;
the police will be immediately dispatched to help you.
This information was recently broadcasted on TV and it states that
it is seldom used because people don't know it exists. Please pass
this along to everyone possible.
I will post some more trading tips on 13th August.
Keep investing money only in Indian Markets...
Physical security:
ATM is totally impregnable. Currency is stored in cassettes, which
can be opened only with special jigs, which are maintained in
custody. These cassettes are placed inside the ATM in special steel
safe with a combination lock. The safe also has an alarm, which is
set-off when there are attempts to make unauthorized entry or when
the safe door is forced. The alarm system is an electronic one,
which is wired into the central alarm monitoring system. There is
also a back up alarm system in case of power failure.
ATM Security Manual
An informed, security-conscious customer is far less likely to be
defrauded. Foreword This manual is designed to ensure optimal
levels of customer safety and convenience at ATMs.
It is true that law enforcement agencies around the world need the
communities they police to play a part in the upholding of law and
order. In being more security-conscious, and taking precautions
whenever possible, citizens can help prevent crimes from taking
place. This is equally true when it comes to ATM usage.
Therefore, we would like to appeal to all regular users of ATMs to
read this manual and practice its simple guidelines.
The Global ATM Security Alliance was formed to assist law
enforcement and fraud prevention agencies and to strengthen the

18

industrys protections against criminal activity. We are proud to

present this ATM Security Manual for Customers for your benefit.
It includes The Worlds Top Twenty Tips for ATM Use collected
from Australia, New Zealand, United States of America, United
Kingdom, Europe, Canada, India and South Africa.
ATM Safety
Automatic Teller Machines (ATMs) have revolutionized banking
allowing customers to do their banking 24 hours a day. They also,
however, have been a great help for thieves looking for quick cash.
This workshop focuses on some of the things to be aware of when
you use your ATM.
Memorize Your PIN: Don't write it down on your card, or on a
piece of paper you store in your wallet. If your card or wallet were
stolen, the thief would have your PIN.
Be Ready for Your Transaction: have your card ready, have your
code in your head, and fill out any deposit envelopes before you
approach the ATM. Take some envelopes with you and complete
them at home or in your locked car at your next transactions.
Be Aware of Your Surroundings: Look at the area around the
ATM; is it well lit? Is it in a remote area, or are there many cars
passing by? Are there any cars or people 'hanging out' in the area?
Is your gut instinct telling you this is a safe area? Consider using
the ATM during daylight hours, when you can see better and others
can see you better. If you must use an ATM at night, consider one
inside an open business like a grocery store.
Protect Your Code: When using the ATM, block other people's
view; don't allow others to see your code, what type of transaction
you are making, or how much money you are withdrawing.
Lines in the Area: If there is a line behind you in the ATM and
someone is too close to you, ask them to step back. If they do not
step back, you may want to cancel your transaction and either wait
in your car, or use the ATM at another time.

19

Quickly Put Away Your Money: Put your money in your wallet
and put your wallet away immediately. Count your money when
you are safely inside your car or home. Before you leave the ATM,
check your surroundings - is anyone around? Also put away your
card and receipt.
Avoid Large Cash Withdrawals: If you were robbed or lost your
wallet, at least you would only lose a smaller amount of cash.
Take All of Your Receipts With You: Don't let a potential thief
know how much money you have withdrawn or how much you
have in the bank.
If You are Driving: Park as close as you can to the ATM, and lock
your doors. Keep your keys handy so you can enter your car
quickly after completing your transaction.
Drive-Up ATMs: Assess the surroundings of the ATM - are people
'hanging around' on foot or in vehicles? If it feels unsafe to you,
choose another ATM. Keep your doors locked. Keep all windows
up except the one you are using. Keep the car running and keep
aware of your surroundings.
Check Your Account Report: Notify your bank and the police if
you notice any suspicious or unauthorized ATM transactions on
your monthly statement.
If Your Card is Stolen: Immediately contact the police department
where you are, and contact the financial institution responsible for
the ATM card. Thieves typically have about a four to eight hour
window they can use stolen ATM and credit cards since owners
don't report them stolen right away. You may not be liable for any
items debited from your account if you report it right away.
Bring a Friend: A thief is less likely to attempt to rob you if you
have someone with you.

20

If You are Followed: Go to an open business and call the police.

Provide a description and direction of travel of the person or
vehicle following you.

Self-Service Banking and ATMs in the 21st Century

"This report is clearly authoritative and comprehensive an
excellent summary of current and future thinking." Ian Bain,
Executive Director, Atmia Europe (ATM Industry Europe)
This report is concerned with all types of self-service equipment or
customer-activated terminals, including the automated teller
machine (ATM), automated depository, and kiosk.

21

In practice, equipment other than the ATM is still in the minority,

and the population figures for ATMs therefore remain the best
proxy for an overall assessment of the installed self-service base.
Many external factors (including political, economic and social)
will determine the rate of growth and nature of the global estate.
Industry consensus predicts the further automation of the counter,
the development of the kiosk, and videoconferencing, as the selfservice developments that will have the greatest impact in the short
term.
Research undertaken in the compilation of this report would
support that viewpoint.
The total global estate of ATMs reached 1.142m by the end of 2001
(the latest date at which consolidated market data is available) and
is projected to reach a global total of 1.54m by end 2007.
Of these, 345,000 were located in the USA, a number that
exceeded the machine populations of every other region.
For example, outside Japan, the populous and economically
dynamic Asia-Pacific region still had fewer than 200,000 machines
in operation.
Members of the major payment systems organisations, MasterCard
and Visa, have access to around 800,000 ATMs globally. (Sources:
Retail Banking Research, MasterCard and Visa)
This report looks at the development of the industry and gives you
a complete guide to the worldwide market and pays particular
attention to developments in the USA, Asia-Pacific, Western and
Eastern Europe and Africa.

22

How much ATM is in your future? - Information

Technology
Tom Gill, CEO of FORE Systems, looks out on a different world
from one that existed just 18 months ago. "There was a lot of
confusion 18 months ago about frame and cells and how to deploy
a backbone infrastructure and IP infrastructure for all of your
communications needs," he says. Now, network designers have a
much clearer idea of what they want to accomplish and how to do
that.

23

Gill says there is a shift in large enterprises from the tactical to the
strategic use of the corporate network. It is no longer acceptable to
plug in a solution and hope it works in an environment that is close
to capacity. Instead, enterprises are looking to create an
"information utility.
"An information utility is like your electric utility or your water
service," he says. "It's always there, like your phone system. The
idea is to create that same feel for information systems. It's ready.
It's predictable. It's on demand. It's secure."
It's also scalable. The typical large company with multiple
locations wants to link up its campuses, boost capacity, run
applications over the campus backbone, and boost the edge of the
network. Furthermore, the company wants that network to be ready
for future applications--particularly those that depend on service
guarantees.
ATM can do that, Gill says. It can also serve to unify widely
scattered offices. "The wide area and remote offices can be
consolidated into their campus backbone over one infrastructure.
It's cost effective, and it makes a lot of sense."
Gill is, understandably, an advocate of the values of ATM--its
scalability and quality of service guarantees. But he doesn't expect
it to go to the desktop. Beyond the wiring closet, Gill favors
Ethernet--and FORE has bought several Ethernet companies,
including, most recently, Berkeley Networks. The combination of
the two has become the most logical way of simplifying the
network, he says.
"Certainly we agree that frame and Gigabit Ethernet are going to
have a role, or we wouldn't have bet our money on Berkeley
Networks," he says. "How it's positioned is important. We're not
selling religion here. We're painted as an ATM company, but we've
been selling Ethernet for several years as an integrated solution
into ATM."
FORE customer Robin Hinson agrees. Hinson is manager, systems
and networks, for Dr Pepper/Seven Up, Inc., in Plano, Texas.
Hinson designed and installed an ATM backbone on the campus
early last year. "Building a global IT data center, I did not want to
be forklifting stuff," he says. He wanted a scalable infrastructure
that would serve the company for the next three to four years.

24

Hinson has more than 1,100 users in the data center and external to
the building, and he was able to upgrade the data center ahead of
the users. "For a period of time I had two different buildings online
that were about 25 miles apart with an ATM connection: I was able
to move the data center over six months ahead of the user
community." When he had to make the decision about the system
architecture, Gigabit Ethernet did not have a lot of standards, and
ATM did. What appealed to him about ATM was the variety of
applications the network handles and its scalability.
"Applications are by far the terrific test," he says. Dr Pepper runs
SAPR3, Lotus Notes, Oracle, Novell, and Microsoft NT, and is
ready for video and voice. ATM goes to the wiring closet, and then
it's Ethernet 10/100 to the desktop. With the FORE switches,
Hinson says, "Each user has a dedicated PIN 100 port. Where it's
cost-effective is that in the user community there are a lot of
moves, adds, changes. I'm ready for it. I get immediate return on
investment and future return because I don't have to retrofit." The
new network even gives him some time to plan.He would not have,
he says, made a different decision.Gill says a flexible and scalable
network takes a sizable load off managers like Hinson. "There's a
big frustration amongst the network managers in terms of the
moves, adds, and changes, as well as complexity and costs
associated with legacy networks," he says. "The ability to have
some freedom outside of the office where you're not being beeped
and chased down and telephoned 24 hours a day because the
network is is not reliable is a huge issue. What we try to do is give
those IT managers the opportunity to focus on other things that
give the organization much more bang for the buck." Gill is
looking for more happy customers, he says. In fact, FORE is
focusing more on management and integration with applications,
coining the term "Intelligent Infrastructure" to describe the
combination of hardware and software. "The Intelligent
Infrastructure is focused on the complexity issues, ease of use, and
cost of ownership," Gill says. "It's a way to simplify the network
and allow the software, which is the intelligence, to make many of
the decisions and take some of the complexity out. Therefore, it's
somewhat self-healing, self-tuning, self-configuring, and very
resilient. "Rather than stay in the enterprise backbone, however,

25

Gill is steering FORE towards new markets--the midsized business

market on one side and the carrier market on the other. "Many of
the large enterprise customers that we do business with today
function like service providers," Gill says. "A large utility company
with lots of rights of way or a large petroleum company that has
high bandwidth needs but also has communications needs
throughout many remote field operations, need carrier-class
connections."
"ATM and IP should be integrated together as part of a managed
service, and given the prevalence of IP infrastructure, ATM for
many of the service providers represents the best transport
mechanism for IP," Gill says. He thinks that is especially true of the
ISP that wants to move from data to voice and video. "They can
deploy an ATM backbone infrastructure to transport IP, but also to
enable, down the road, the services they desire to offer. They're not
going to be able to do that with a routed infrastructure." And the
carriers have the same problems as do enterprises: legacy
infrastructures with multiple services. "They're not all ATM
oriented, but ATM represents a terrific way to enable many of the
services that they want to offer. What's happening is many of the
carriers are actually enjoying business from enterprises, where the
enterprise outsources its wide area network to the carrier," he says.
"We're one of the only companies--Cisco is one of the few others-to sell to the carriers and the enterprise customers, and we bring
carriers enterprise business as a channel for them."

Date: Jul 13, 2007

Guidelines for issue of ATM-cum-Debit Cards by UCBs

26

RBI/2007-2008/95
UBD (PCB) Cir No. 6 /09.18.300/2007-08
The Chief Executive Officers of
All Primary (Urban) Co-operative Banks
Dear Sir/Madam,
Guidelines for issue of ATM-cum-Debit Cards by UCBs.
Please refer to our circular
UBD (PCB).BPD.Cir.No.50/09.69.000/05-06 dated April 28, 2006
permitting the banks fulfilling certain eligibility norms to install
ATMs and issue ATM-cum-debit cards.
1. It has been now been decided to issue guidelines for issuance of
ATM-cum-Debit Cards. Banks which are authorized to install onsite /off-site ATMs, as per the policy in force, may introduce ATMcum-Debit cards with the approval of their Board keeping in view
the guidelines as given in Annex I. Issuance of offline debit card
is however, not permitted. The details of the ATM-cum-debit cards
introduced may be advised to the Regional Office concerned of the
Reserve Bank of India together with a copy each of the agenda note
put up to their Board and the resolution passed thereon.
2. UCBs should not issue ATM-cum- debit cards in tie-up with
other non-bank entities.
3. UCBs may review operations of these cards and put up review
notes to their Boards at half-yearly intervals, at the end of March
and September, every year. A report on the operations of these cards
issued by banks should be forwarded to the Reserve Bank of India ,
Department of Payment and Settlement Systems (DPSS) with a
copy to the Regional office concerned of Reserve Bank of India on
a half yearly basis, say at the end of March and September every
year, incorporating information as indicated in Annex II
(N.S.Vishwanathan)

27

Chief General Manager-in-Charge

ANNEX I
Guidelines for Issuance of ATM-cum- Debit Cards by UCBs1. Coverage
The guidelines apply to the cards encompassing all or any of the
following operations:
Electronic payment involving the use of card, in particular at point
of sale and such other places where a terminal / device for the use /
access of the card is placed.

28

The withdrawing of bank notes, depositing of bank notes and

cheques and connected operations in electronic devices such as cash
dispensing machines and ATMs.
2. Cash Withdrawals
No cash transaction, that is, cash withdrawals or deposits should be
offered at the Point of Sale, with the ATM-cum-debit cards under
any facility, without prior authorization of RBI under Section 23 of
the Banking Regulation Act, 1949.
3. Eligibility of Customers
The banks can issue ATM-cum-debit cards to select customers as
per their own eligibility criteria subject to compliance with 'Know
Your Customer' guidelines. Banks can extend the ATM-cum- debit
card facility to those having saving bank account / current account /
fixed deposit accounts with built-in liquidity features maintained by
individuals, corporate bodies and firms. Debit card facility should
not be extended to cash credit / loan account holders.
4. Security and other aspects
(a) The bank shall ensure full security of the card.
(b) No bank shall despatch a card to a customer unsolicited, except
in the case where the card is a replacement for a card already held
by the customer.
(c) Banks shall keep for a sufficient period of time, internal records
to enable operations to be traced and errors to be rectified (taking
into account the law of limitation for the time barred cases).
(d) The cardholder shall be provided with a written record of the
transaction after he has completed it, either immediately in the form
of receipt or within a reasonable period of time in another form
such as the customary bank statement.

29

(e) The cardholder shall bear the loss sustained up to the time of
notification to the bank of any loss, theft or copying of the card but
only upon a certain limit or fixed amount or a percentage of the
transaction agreed upon in advance between the card holder and the
bank, except where the card holder acted fraudulently, knowingly or
with extreme negligence.
(f) Each bank shall provide means whereby its customers may at
any time of the day or night notify the loss, theft or copying of their
payment devices.
(g) On receipt of notification of the loss, theft or copying of the
card, the bank shall take all action open to it to stop any further use
of the card.
5. Terms and Conditions for issue
The relationship between the bank and the card holder shall be
contractual. As such:
a) Each bank shall make available to the cardholders in writing, a
set of contractual terms and conditions governing the issue and use
of such a card. These terms shall maintain a fair balance between
the interests of the parties concerned.
b) The terms and conditions shall be expressed clearly.
c) The terms shall specify the basis of any charges, but not
necessarily the amount of charges at any point of time.
d) The terms may be altered by the bank, but sufficient notice of the
change shall be given to the cardholder to enable him to withdraw if
he so chooses. A period shall be specified after which time the
cardholder would be deemed to have accepted the terms if he had
not withdrawn during the specified period.

30

e) (i) The terms shall put the cardholder under an obligation to take
all appropriate steps to keep safe the card and the means (such as
PIN or code) which enable it to be used.
(ii) The terms shall put the cardholder under an obligation not to
record the PIN or code, in any form that would be intelligible or
otherwise accessible to any third party if access is gained to such a
record, either honestly or dishonestly.
(iii) The terms shall put the cardholder under an obligation to notify
the bank immediately after becoming aware: of the loss or theft or
copying of the card or the means which enable it to be used; of the
recording on the cardholder's account of any unauthorised
transaction; of any error or other irregularity in the maintaining of
that account by the bank.
(iv) The terms shall specify a contact point to which such
notification can be made and that such notification can be made at
any time of the day or night.
(v) The terms shall put the cardholder under an obligation not to
countermand an order, which he has given by means of his card.
g) The terms shall specify that the bank shall exercise care when
issuing PINs or codes and shall be under an obligation not to
disclose the cardholder's PIN or code, except to the cardholders.
h) The terms shall specify that the bank shall be responsible for
direct losses incurred by a cardholder due to a system malfunction
directly within the bank's control. However, the bank shall not be
held liable for any loss caused by a technical breakdown of the
payment system if the breakdown of the system was recognizable
for the cardholder by a message on the display of the device or
otherwise known. The responsibility of the bank for the nonexecution or defective execution of the transaction is limited to the
principal sum and the loss of interest subject to the provisions of the
law governing the terms

31

ANNEX II
Reporting Format for the Issue and Operations of ATM-Cum-Debit
Cards1. Name of the Bank2. Period of Reporting3. Type of the card with hardware components-(IC Chip) eg.,

32

Magnetic strip, CPU, Memory4. Type of the software used5. Security standards followed6. Service provider (Self or otherwise)7. Total number of outlets where the ATM-cum-debit card can be
used of which(a) POS Terminal- (b) Merchant Establishment(c) ATMs-(d) Others please specify.

8. Total number of cards issued-of which(a) Against Currant account-(b) against Savings account(c) against Float Account9. Total Number of Transactions during the period10. Amount involved in the Total Number of Transactions11. Instances of frauds, if any, during the period.
(a) No. Of frauds-(b) Amount Involved-(c) Amount of loss to the
bank- d) Amount of loss to the card holder-

Benefits of Biometric supported ATMs

Provides strong authentication
Can be used instead of a PIN
Hidden costs of ATM card management like card
personalisation, delivery, management, re-issuance,
PIN generation, help-desk, and re-issuance can be
avoided
Ideal for Indian rural masses

33

It is accurate
Flexible account access allows clients to access their
accounts at their convenience
Low operational cost of the ATMs will ultimately
reduce TCO
How it works
With ATMs supported by biometric solutions, banks having a
presence across the country are leveraging on this technology. The
ATMs are networked and connected to a centralised computer
(Switch), which controls the ATMs. The use of biometrics
identification is possible at an ATM. The information can be stored
at a bank branch. ATMs are so prevalent and you have so many
people using ATMs that it becomes easy to use biometrics as a
replacement for an ATM PIN. The typical ATM has two input
devices (a card reader and keypad) and four output devices (display
screen, cash dispenser, receipt printer, and speaker). Invisible to the
client is a communications mechanism that links the ATM directly
to an ATM host network. The ATM functions much like a PC, it
comes with an operating system (usually OS/2) and application
software for the user interface and communications.
While most ATMs use magnetic strip cards and personal
identification numbers (PINs) to identify account holders, other
systems may use smart cards with fingerprint validation. The ATM
forwards information read from the clients card and the clients
request to a host processor, which routes the request to the
concerned financial institution. If the cardholder is requesting cash,
the host processor signals for electronic funds transfer (EFT) from
the customers bank account to the host processors account. Once
the funds have been transferred, the ATM receives an approval
code authorising it to dispense cash. This communication,
verification, and authorisation can be delivered in several ways.
Leased line, dial-up or wireless data links may be used to connect
to a host system, depending on the cost and reliability of the
infrastructure. The host systems can reside at a clients institution
or be part of an EFT network. The EFT network supports the
fingerprint authentication. Point-of-sale services that use biometric
solutions are also possible.

34

Shekar says, The FSS Biometric ATM Solution consists of a

central server which holds a repository of customer fingerprints. It
also customizes the Switch to enable authorization of a customers
biometric data and interfaces with ATMs enabled with biometric
devices as per FSS specifications. The central server solution is
platform independent, it uses Java and can run on Unix and Oracle/
Microsoft SQL Server; customisation to BASE24 Switch (of which
FSS is the distributor) is done using TAL. Biometric application
and devices from Secugen are used for customer interface and
application development.
Axis Technology on the other hand, has developed an innovative
new product called the Biometric Retrofit Kit for ATMs. This kit
converts a regular ATM to one that authenticates users based on
biometricsfingerprint or iris. This is an affordably priced kit tat
has generated interest among financial institutions.
Recent Initiatives
Deploying ATMs for rural masses depends largely on banks
stepping forward to take the requisite initiatives. The recent
directive from the government on financial inclusion (banking for
the common man) is a key driver for the growth of such solutions
in India. Banks are quite aware of the untapped potential in the
rural sector. The telecom industry is witnessing a blistering growth
pace, and so is the Internet. The National Rural Employment
Guarantee Program that guarantees employment and payment in
the rural sector requires robust solutions. Using thumbprint and
voice guidance in ATMs reduces literacy requirements to a
considerable extent. However, the technology is not restricted to
rural masses. FSS is in discussions with Andhra Bank for
deploying the BAIS. Several other public sector and private sector
banks have shown interest too. Says Shekar, FSS would like to
work with ATM and POS vendors to provide innovative and cost
effective solutions to banks and customers. FSS is striving to
modularise and ruggedise the solution to perform online functions
across a wide variety of delivery channels and payment systems.
Apart from these banks, some other banks such as ICICI Bank are
planning to introduce biometric authenticated ATMs in rural India.
CMC has been working with Institute for Development and
Research in Banking Technology (IDRBT) on a pilot project in

35

rural banking. Biometric (Fingerprints) smart cards, which consist

of fingerprint data and financial data, will be issued to the rural
banking customers for carrying out financial transactions.
Elaborates Mehtre, For building and developing various
applications, CMC has a biometric technology group at its
Research and Development Center in Hyderabad. The team
evaluates the latest technologies emerging in the biometrics area.
This helps CMCs solutions to be competitive and cost effective.
CMC has been working with Bank of India for introducing
biometric ATMs. CMC has demonstrated its Biometrics ATM
solution on the eve of inauguration of mobile ATMs for the bank.

ATM Growth set to explode in India

10 years ago, an ATM was a novelty in Indian bank branches. But
with the entry of aggressive private sector banks, ATMs have
mushroomed in the urban Indian landscape. Srikanth RP and
Rajneesh De analyse the ATM explosion in India and say that
newer uses for ATMs will see growth shoot up even further
Banking in India has come a long way thanks to a combination of
factors like increasing consumer awareness, technological
advancement, as well as the growing financial muscle of our

36

populace. Even the acclaimed Rip Van Winkles of the Indian

financial industry the PSU banks are moving up another gear in
embracing technological innovation. One such innovation is the
Automated Teller Machine (ATM), todays most preferred mode of
delivery channel in all FIs. Banks like ICICI Bank, UTI Bank and
HDFC Bank all deploy ATMs aggressively and have seen their
customer base swell. Subsequently, even PSU banks have followed
suit with an increasing number of ATMs.
Global perspective
But how does India stand against the rest of the world in ATM
installations? World ATM installations are set to rise by 45 percent
over the next few years till 2004, according to a new report by
Retail Banking Research. Currently there are over 800,000
machines operating worldwide and this figure will rise to over
1,150,000 by 2004. Of the global figure, the largest market was
Asia-Pacific, which accounted for 253,000 installations, nearly a
32 percent global share. Of these machines, the majorities
142,500were in Japan. North America has become the second
largest region with 221,000 machines. Western Europe has fallen to
third position with 219,000 ATMs. Both regions each hold over 27
percent of the world total. During the past two years Latin America
has significantly increased its share in the world market and now
has 82,500 installations, over 10 percent of the global total. Their
are a further 14,500 machines in the Middle East and Africa.
Finally, the emerging markets of Eastern Europe account for
11,500 terminals.
Looking forward, the USA will still lead the rankings in ATM
installations in 2004. However China seems likely to rise into
fourth position by 2004. In terms of growth in installations the
picture is very different. India, Bulgaria, Egypt and Bolivia will
show dramatic increases in their installed base. However
developments in recent years in some countries, such as Russia and
Indonesia, mean that future growth is well below what was forecast
earlier in the decade.
PSU banks-In the drivers seat

37

Market analysts believe that the growth in the installed base of

ATMs, which was primarily driven by private sector banks, will be
driven by Indian PSU banks in the next year. The number of ATMs
is predicted to reach 30,000 units within seven years, from the
current installed base of around 4,500. The retail-banking scene is
getting hotter by the day with banks going all out to increase access
points. This is great news for ATM
Majors like NCR India and HMA Diebold, which are fighting
aggressively to increase market shares. At stake is a pie of Rs 250270 crore, which is expected to grow exponentially at a growth rate
of over 100 percent. Ironically, the introduction of ATMs in India
was not warmly welcomed by the various labour unions. But now,
you
can
witness
ATMs
everywhereright
from
Gobichettipalayam, a southern most town of Tamil Nadu to
Hazaribagh in Jharkhand.
Says Srinivas Rao, business head with the Self-Service Solution at
NCR India, With PSU banks going all out to tap the retail market
through ATMs, the market is ready to explode. We are extremely
bullish on the Indian market and are witnessing growth rates of
over 100 percent. Agrees Harish Murthi, managing director,
Diebold HMA; There has been tremendous growth in the last few
years. In the years 2000 and 2001, the market has grown by a
whopping 100 percent over the previous year. We expect it to grow
at a rate of 80 percent annually in the next couple of years.
That India is a boom country for ATMs is corroborated by a report
from the Global ATM Directory 2000 edition which states that the
Indian market for ATMs is expected to grow at an estimated growth
rate of 486 percent, while Chinas growth has been pegged at just
over 200 percent.
Rao cites the case of China where the installed ATM base currently
stands at 26,000, up from 1,600 eight years ago. ATM vendors are
comparing India as the next China, and are expecting similar
growth in India. Explains Rao, Every technology takes time to get
accepted. It is no different with ATMs. For example, in China
during the years 1982-1993, there were only 2,000 ATMs. But

38

during the years, 1993-2000, it boomed to over 48,000 ATMs.

India too is witnessing a similar trend.
Adds Murthi, Unlike China, the reach of the banks is wider in
India. Even in the most remote village of India, a public sector
bank can be found. However, population-wise the reach of banks is
limited. The amount of banks catering vis--vis 100 people would
be lower than many developed countries. In such a scenario, ATMs
come as a boon. Hence there is a definite possibility of India
growing over China in the ATM market.
Winning strategies
In a move to earn greater revenues, every vendor worth his salt is
trying out innovative strategies. For example, Diebold HBA offers
a total managed service called Total Implementation Solution
(TIS). This gives banks a single window for procuring all their
ATM related needs. The basket of solutions includes ATM
monitoring, software distribution for ATMs, cash management and
network management.
Many Indian banks that were hampered because of lack of
knowledge of technology are now actively talking to ATM vendors
for outsourcing their needs. For example, Bank of India recently
signed an agreement with India Switch Company, a Diebold HMA
group company, for outsourcing the setting up of ATMs. Other
banks-especially PSU and co-operative banksare expected to
follow this trend.
Rival NCR too has concentrated its energies on offering specialised
solutions besides the usual strategy of providing and maintaining
ATMs. Explains Rao, Our ATM models in India range from
simple cash dispensers to scalable ATMs that can be customised
according to individual client requirements. We also offer
specialised models that dispense information and non-cash items
such as tickets and coupons.
As part of its strategy in offering innovative services, NCR is
talking to the Railways in Mumbai for deploying an ATM, which

39

could be used to dispense railway tickets. The focus is on letting

the customer use the ATM as a medium which can be used for noncash transactions like payment of bills, insurance payments,
printing of statements or accessing the Internet. Adds Rao, The
key idea is to get the customer used to these channels and then
migrate him to different low cost channels like the Internet. For
example, a customer using a Web-enabled ATM would be more
likely to go in for, say, a service like Internet banking. Also, from
the banks point of view this would be more cost effective as a
transaction over the Internet would only cost the bank
approximately Rs 10-12 per transaction.
NCR is also looking at offering solutions that can bundle the ATM
with the smart card. For example, the value of a Petrocard (a smart
card with stored value used in petrol stations) would double if the
Petrocard user has the option of topping up the pre-paid value of
the card via an ATM. This option would give the customer better
flexibility.
Adds Piyush Khaitan, VP, Venture Infotek, The trend now is to
use the ATM as a tool to acquire new customers and retain them by
providing a range of services. Banks are slowly waking up to the
ATMs potential as a serious marketing tool. They are also earning
sizeable revenues by using ATMs to advertise products from other
companies. A few banks are offering utility bill payment facilities
on their machines too. Apart from that, a variety of services
ranging from railway card/season tickets and cinema tickets to
dispensing of mobile phone smart cards are being thought of as a
part of the strategy to attract customers and earn extra revenue.
Another unique strategy from NCR is the installation of local
language ATMs that are available in almost all Indian languages. In
rural areas for example, some farmers are extremely rich but do not
have access to ATMs. How do banks reach out to such people? The
answer is in the form of intelligent ATMs. Besides, an illiterate
person would not be able to use an ATM, whichever language it
displays. The answer is an ATM that offers an audio aid, which has
clear instructions on how to withdraw cash in the language he
speaks.

40

Visible trends
Worlds Top Ten ATM Explains Rao, We are seeing two distinct
Countries Ranked Acc- trendsstate-run banks are installing
ording to Number of ATMs to ensure that they do not lose
Machines, end 2000 customers, and to cut costs, while private
Country Installations
USA 197,500
Japan 142,500
Brazil 46,500
Germany 45,500
South Korea 41,500
Spain 38,000
France 29,500
Italy 29,000
UK 25,000
Canada 23,500
Source: The Global
ATM Market to 2004

and foreign-owned banks are using it to

acquire customers. This does not mean
that the cost-factor is not relevant to the
latter. Again, of the installed ATM base,
nearly private and foreign players account
for 70 percent. We also see that state-run

41

entities have more of onsite ATMs. Adds Mani Mamallan, senior

vice president, India Switch Company; ATMs have evolved from
only basic cash dispensing solutions to one which can provide
value added services. The future of ATMs will be touch-screen
kiosks, payment of bills, and smart cards bundled in with ATMs.
Other factors like non-banks setting up ATMs, when that is
allowed, will also offer buoyancy to the market. This segment is
closed as there is a central banking regulation that prevents it from
happening. But both Murthi and Rao feel that the entry of nonbank players, as and when it happens, will lead to an exponential
growth in ATMs.

Worlds Top Ten ATM

Countries Ranked AccLocal challenges
ording to Percentage
Growth in Installations,
Though the market is currently dominated 2001-2004
by Diebold HMA and NCR, local players
like Tata Infotech are also trying to get a Country
foothold in the Indian ATM landscape.
Says Zakir Hussain, national manager for 1 India
marketing at Tata Infotech, Looking at the2 Bulgaria
huge demand for ATMs in India, our ATM3 Egypt
initiative, which started off as an export4 Bolivia
commitment, has now been expanded to5 China
the domestic market. Tata Infotech is one 6 Poland
in a rare club because unlike the others, it 7 Peru
does not import ATMs but manufactures8 Russia
them itself. Tata InfoTech too offers a full 9 Indonesia
10 Philippines

42

Source: The Global

ATM Market to 2004

range of solutions to the customers, which cover the gamut of cash

dispensers and ATMs. The companies own software group ensures
that the necessary software is provided to help the banks integrate
their back-end banking software.
Then there are solution providers like Venture Infotek who provide
solutions that start from ATM site preparation to the entire backend
management of the ATM business. Says Udai Singh Pathania,
president and head, financial institutional business, Venture
Infotek, Being a transaction processing company we are looking
at the networking and running of the ATM business rather then the
sales of ATM units. He is also planning to tie up with strategic
ATM manufacturers to specifically target co-operative banks who
he feels will be one of the major upcoming players in this segment.
These banks do not have the financial muscle of the other MNC or
private banks and very few of them can afford to invest in
technology. We would also be focusing on interconnecting these
banks ATMs. This will help co-operative banks to offer their
customers the facility of transacting on any ATM on Ventures
network, he adds. Venture Infotek recently implemented a turnkey
ATM solution project for BNP Paribas, wherein their entire ATM
services was outsourced by the bank to the company.
Success stories
ICICI Bank is one bank, which has seen a massive surge in
volumes, since the introduction of ATMs. The number of ATMs,
which numbered around 90 in December 1999, has now swelled to
540. Currently, the total volume of ATM transactions is pegged at
an astronomical 2,00,000 transactions a day. Says P K Vohra, joint
president, ICICI InfoTech Services, The larger the volume of
transactions, the less the cost per transaction. Also, the
convenience of anytime money has attracted a lot of customers,
and the bank has seen its customer base swell three-fold from 6.5
lakh in March 2000 to 20 lakh in March 2001. ICICI has also
shown how technology can translate into reduced costs. Typically,
a transaction through a bank branch costs approximately Rs 45.
The same transaction done telephonically costs Rs 30, through an
ATM costs about Rs 18, and through the Internet in huge volumes,

43

only Rs 4. Just a look at the volumes of transactions done at the

ICICI ATMs indicates the high level of success the project has
seen.
Existing bottlenecks
But in spite of all the positive signals, there are problems galore,
which if not set right, can come in the way of ATM growth rates in
India. One is the familiar infrastructure problem. Other problems
are issues like obtaining many different permissions from different
authorities like the municipal authorities, building society
permission, permission for locating VSATs on top of a building,
obtaining permission from the local telecom provider, etc. The
rapid deployment of ATMs earlier was because of the fact that
there was no permission required from the Reserve Bank of India.
But today this is mandatory. Industry experts point out that this was
done because there were a lot of banks, which set up ATMs without
adequate funds. The RBI wanted to check the status of banks
before allowing them to set up ATMs.
Most banks today are looking at ATMs not only as a delivery
channel that bring in customers in droves but also significantly
reduce transaction costs. But, whatever forms the ATM assumes in
future, one thing cannot be ignored by any bankthe fact that
ATMs have come to stay.

44

Quick Facts about ATMs

There are over 1.2 million ATMs installed worldwide.

Approximately every 5 minutes a new ATM is installed.
Various industry bodies help to self-regulate the ATM
industry including: banking associations, electronic funds
transfer associations, network associations and the
internationally active ATM Industry Association (ATMIA).
The ATM is one of the most important technological
inventions of the second half of the twentieth century,
helping to create the 24 X 7 open convenience demanded by
the consumer society.
The ATM provides millions of cardholders around the world
with convenient 24 X 7 all hours access to their own banked
cash near to where they live, work and shop.
ATMs have made banking more convenient today than ever
before: with the touch of a few buttons, cardholders can
withdraw cash, make deposits, top up air time, pay bills and
transfer funds.

The industry does care about the security of cardholders and has
formed a Global ATM Security Alliance to combine global security

45

resources to stamp out crime and fraud connected to ATMs.

Copy a cards security information on its magnetic stripe in order
to reproduce the information on a counterfeit card.
Card swapping where a customers card is swapped for another
card without their knowledge during an ATM transaction.
Shoulder surfing where an individual stands close by to observe
PIN entry.
Compromise of PIN number either the customers PIN is noted
by observation shoulder surfing or through binoculars or a
hidden camera illegally records the PIN.
Vandalism where an ATM machine is deliberately damaged
and/or the card reader is jammed preventing the customers card
from being inserted.
Physical attacks where an ATM machine is physically attacked
with the intention of removing the cash.
Diversions when criminals use messages and signs affixed to
ATMs either to make the modifications they have made to the ATM
look less suspicious or to direct customers to a nearby ATM, which
they have compromised.

46

ANALYSIS THE SURVEY

Analysis for the better understanding of the HSBC bank
account holders was carried out. The purpose of analyzing was to
know customer satisfaction, awareness of the ATM offered by the
bank and that, their view about some facilities they would like to
have and improvements suggested for better working of the bank
and higher satisfaction.
Questionnaire method was used to carry out the survey. The
survey was carried out in the different part of city of Mumbai.
Different type of account holders like saving account & current
account, fixed account holder were interviewed. Some very
interesting facts came up which will be dealt in detail later. A set of
10 questions was used in the questionnaire. Which varied from
objective type to descriptive types of questions. Questionnaire was
framed and design in such a manner that it could be filled up within
5 minutes by the person thus saving time of interviewee.
The sample size of the survey was taken to be 50. of this 50
people 20 questioned were to business person, 15 people were
servicemen and professional, 10 students and 5 housewives or
other categories. Questions ranged from getting information about
ATM using, depositing money in ATM etc.

47

Besides the questionnaire, method information was also

gather by means of secondary data from sources such as:
1. Branches of HSBC
2. HSBC websites.

SHRI CHINAI COLLEGE OF COMMERCE &ECONOMICS

Survey for Project on Automated Teller Machine (ATM)
NAME: ______________________________________________
DESIGNATION: _______________________________________
SIGNATURE:__________________________________________
CONTACT
NO:_________________________________________
1. Do you have ATM card?
Yes

Or No

2. How do you find depositing money in ATM?

Complex

OR

Simple

3.Do you find using ATM card Risky?

Yes

Or No

4.comparing the bank how do you like service of ATM?

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Good

Better

Best

5. Which bank you prefer for ATM cars?

Private bank

Nationalize bank

Suggestion: ________________________________________
________________________________________
Project Guide: Prof.Nishikant Jha
Survey conducted by:
Priya R Gadoya
TY.B.B.I. Roll no-16

Signature:__________

1. Do You have ATM card?

Yes
60%
No
40%

2. How do you find depositing money in ATM?

Simple
75%
Complex
25%

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3. Do you find using ATM card risky?

Yes
50%
No
50%

4. Comparing the bank how do you like service of ATM?

Good
10%
User of ATM card
Better
75%
Best
15%

Good
Better
Best

5. Which bank you prefer for ATM card?

Private
75%
Nationalize
25%

50

Questionery for Banker

1.How Many ATM Centres in our country & out side Country
Ans. Over 15000 Centres Approx. One Million out side Country
2. How much Bank charges your are charged to Provide ATM
Facility?
Ans. Rs. 150/- p.a
3.On and average How much cash do you put in to ATM?
Ans. 2 Lacs to 2.50 Lacs per Week.
4.Custmors complaintss about ATM Card?
Ans. Not accepting ATM card in Some Machines.
5. How do you handle ATM Problem?

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Ans. Depends upon your problem. Eg. If ATM Card is Lost, and
Custmore Lodge the Complain no more operations are allowed in
that ATM card with Immediate effect.
6. Latest Technology Provided by Bank?
Ans. Internet Banking.
7. As per your View What are the Advantages & Disadvantages of
ATM ?
Ans.Advantage :- 24 hours 7 days services provided to customers
Disadvantage:- If you Lost ATM Card,it can be Misuse by
Some One
8. How Much bank charges are charged if we use other banks
ATM Machine?
Ans. Rs.55 Per transaction
9.What are the software are used by the bank?
Ans. HSBC software development ltd has establish a software
center in pune to develop solution for HSBCs group offices world
wide.
10. How does debit card work?
Ans. ATM is a whilest at Merchant establishment it works it work
in the same way as crdit card accept that the transacted amount is
directly debit from your saving & current deposit account.

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Conclusion
It s a brave new world in the ATM space one that offers a
great deal of flexibility for financial institutions. In this new era, FI
must consider best of breed solutions. Selecting ATM software
separate from ATM hardware will give FIs more leverage, more
choices and more flexibility to add functions and Services in the
future. It also will allow them to complement their networks with
hardware from multiple vendors, thereby helping them reduce their
overall cost of ATM ownership.
ATM is time & cost saving machine. For many customers
ATM are becoming the only interaction they have with their banks.
Having a look at the no of increasing ATM it is clear that in future
there wont be any problem of cash withdrawals.
Due to all these feature in a ATM, the customers is more
likely to prefer the ATMs rather than bank &this may also lead to
alienation of the customer.
In addition ATM are also becoming a competitive mark for
many banks. Therefore it is imperative to ensure that the customers
experience with the ATM is safe and secure.

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It s important to note, however, that not all ATM deployers

will progress at the same rate. Some may decide to address their
networks from a
Software-buying perspective. Others may decide that attacking
hardware. First is the best option. And some may opt for
proprietary solutions, or varying degrees of proprietary and openvendor solutions, over entirely open, multivendor solutions.
Regardless of the route pursued, FIs must understand that open
systems and multivendor software are the way of the future.
Whether they decide to adopt that future now or later will depend
on the size of their networks and the upfront investments they re
willing and able to make.

Bibliography
1. Introduction to computer
Author: - Ms Alka Vaidya
2. J. A. I. I. B. Guidelines
Author:- Gyani
3. Introduction to Banking Financial Services.
Author:- Dr onkar Nath
4. www.Google.com

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