Charging On ATM Use Is Unjustified

When ATM  was introduced , Banking experts considered it as substitute of manpower and advocated that if ATM is allowed to expand its network, bank will save considerably good amount of expenses and will be able to enhance its profitability and also it s business by extending comfort level in withdrawal of money from bank  to customers.

Now pundit of banking have changed their aforesaid viewpoint and now they without any hesitation and without any feel of shame say that ATM is causing loss to banks. Chief of public sector banks ( not private banks )now treat ATM responsible for rising loss or reduction in profitability of banks. 

Boss is always right is an old saying and it holds good now also. If they say sun rises in east , we will have to accept and if they say sun rises in the west , we will  have to accept that too.ATM considered in the past as driver of bank 's business has now become cause of loss.

SBI chief says ATMs in losses, can’t subsidise forever-Business Line 13.01.2014 

(my views given below)

MUMBAI, JAN 12:  

Stating that its ATM operations are making losses, the nation’s largest bank SBI has said it is all for charging customers for transactions.

It also said a commercially viable model is needed for ATM network expansion.

“Whatever services we give, ultimately it has to be a win-win situation.... We just want a commercially viable model, I cannot afford to lose month after month,” State Bank of India Chairperson, Arundhati Bhattacharya, told PTI in an interview.

SBI has the largest network of ATMs.

Bhattacharya also said barring in a few States, the ATM operations are making losses. She did not name the States where the ATM segment is making money.

She said SBI cannot subsidise ATMs forever.

“The loss from ATMs is very concerning. I would like to roll out many more ATMs. I am ready to do that, but I need to explain also how I am going to sustain this,” she said.

Asked about the industry demand that customers be charged for ATM services, especially after the push in costs of ATMs after the Bangalore incident wherein a woman was attacked inside the ATM kiosk, she said SBI supports the idea of charging even its own customers.

“If you are looking at extending the ATM network and making it available to more and more people, there has to be a commercially viable model,” she said.

SBI had an ATM network of 32,777 as of September 2013 and has announced aggressive plans of expansion. The Finance Ministry had mandated that each state-run bank would have an adjoining ATM in place by the end of the current fiscal.

At present, banks allow customers five free transactions per month at other banks’ ATMs and unlimited at own bank’s. However, the home bank has to pay the other bank Rs 15 per transaction, even though the transaction may be for free to customers.

http://www.thehindubusinessline.com/industry-and-economy/banking/sbi-says-atm-operations-making-losses-for-charging-customers/article5569814.ece