Manned ATMs to leave banks poorer by Rs 4,000 cr a month: IBA

Manned ATMs to leave banks poorer by Rs 4,000 cr a month: IBA

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 today.

"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 M V 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, and added IBA has made a representation to RBI for increasing the inter-bank fee from Rs 15 to Rs 18 per transaction and also to scale down the monthly free transactions for a savings bank account holder to five per month.

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.

The IBA, he stressed, has only recommended a change to include all the transactions, including the own-bank ones, to 5 per month and has not suggested any change to the current practice of making an account holder pay Rs 20 per transaction for the excess ones.

Right now, holders of savings accounts enjoy five free transactions per month in other bank ATMs, while there is no cap on own-bank ATM transactions. Banks net off transactions at the end of the month within themselves and pay Rs 15 per transactions plus taxes to other banks irrespective of whether it was a free transaction or not for the customer.

A woman employee of a Corporation Bank in Bangalore was brutally attacked inside an ATM kiosk by an intruder 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.

As this results in additional charges, immediately calls started out for reviewing the charges.

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