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DI
GITALBANKI
NG
MODULE-A
CHAPTER3:ATMs(
PART-
II
I)
Whatwewi
llst
udy
?
*
Whati
sON-
USandOFF-
USTr
ansact
ions.
*
Whati
sIMT?
*
Whatismaximum numberoff
reet
ransact
ions
t
hatcanbedoneatATMs?
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AnI
nter
oper
abl
eATM net
wor
kconsi
stsof
:

I
ssui
ngBank:(
Debi
tCar
dissui
ngbank)
Thecar
dissui
ngbanksi
scal
ledi
ssui
ngbank.
Car
dhol
der
:Cust
omer
Acqui
ri
ngBank:(
ATM machi
neownerbank)
Thebankswhi
chi
nst
allt
heATMs.
Inci
dental
lyallbanksinst
allATMsandi
ssueATM
cards.So,t
heyar eIssui
ngbankinonecapaci
ty,
andAcquiringbanki nanother
.
ATM net
wor
kpr
ovi
der
:
Eachbankpr
ovi
desnet
wor
kfr
om i
tsATMst
oit
s
swit
ch.
Bey
ondthatal
lthebank’
s'swi
tchesar
econnect
ed
tot
heNPCISwitch-theNFS.
So,banks+NPCIconsti
tut
ethenet
workpr
ovi
deror
anetworkcol
labor
ati
on-swit
ch(NFSofNPCI
).
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ATM Net
wor
kSt
akehol
der
s:
TheATM net wor
ki saconnectionofvar
ious
i
nsti
tuti
onsorent i
ti
esthroughhardwareand
communi cati
ontechnologi
es,for
mingawebof
i
nterconnectedplayer
st oensure24x7x365
connect
ivit
yandseaml essATM usage.

Thet
ransact
iononATMscoul
dbeof2t
ypes:

ON-USTransact
ion:I
ntr
a-bank(
withi
n)t
ransact
ion
wheret
hecar di
ssuerbankandtheATM acquir
ing
bankar
et hesame.
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Exampl
e:Debi
tcar
dofSBIandATM Machi
neofSBI
IncaseofON- UStransacti
ons,t
het r
ansacti
onsdo
notcomet otheNFSswi t
chandtheaut hent
icat
ion
andpr ocessingisdonebyt hecardholder
'sbank
i
tselfsincethecar di
ssuingbankandt heATM
machinei nstal
lat
ionbankar et
hesame.
OFF-USTransact
ion:I
nter-bank(outsi
de)
tr
ansacti
onswherecardi ssuerbankandtheATM
acquir
ingbankaredif
ferententi
ties.
Exampl
e:Debi
tcar
dofHDFCandATM Machi
neof
SBI.
Exampl
e:Debi
tcar
dofSBIandATM Machi
neof
RRB.
IncaseofOFF- UStr
ansactions,t
heygot otheNFS
swit
chwhi chsendst hetr
ansactiontotheissuer
swit
chandonr ecei
ptback,forwardsittothe
acquir
erswitchforfurt
herforwardingtotheATM
machinefacingthecustomert r
ansacting.
Thecar
dissuerbank'
sswitchdoest
he
aut
hent
icat
ionandauthor
izati
on.
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Authent i
cati
on:thepr ocessofest ablishi
ngand
val
idati
ngt heaut hentici
tyofthecar dholderand
Authorizati
on:thepr ocessofv al
idationdoneby
cardissuerforfundav ai
labi
li
tyandaddi t
ional
checks.
Itv
erif
iesthetransact
iondet
ail
sfrom i
tsCBS
automatical
lyandrespondsbackallt
hewaydown
tothetransact
ingATM.
Incaseofposit
iveresponse,
thet
ransacti
onis
successful
,whi
leincaseofnegat
iveresponse,
the
transact
ionget
sfail
ed.

I
nst
antMoneyTr
ansf
er(
IMT)Sy
stems:

IMTisani nnovat
ivedomest
icmoneyremit
tance
servi
cethatall
owssendingmoneytoarecei
v er
,
onlybyusingtherecei
ver
'smobil
enumber.(No
needtohav eaccountnumbert
orecei
vethemoney)
I
MTr i
desonbank'
sATM net
workconnecti
vit
y,
wher
etheATM isusedasacust
omerinter
face.
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Ital
lowstheBankcustomertosendmoneytoa
benefi
ciar
y/recei
ver,j
ustbyinput
ti
ngthe
benefi
ciar
y/r
eceiv
er'smobil
enumberandasecret
codegenerat
edduringthetr
ansacti
on.

Thesenderwi
llputhisATM cardintheATM
machineandbyexercisi
ngthisopti
on(I
MT) ,
can
sendmoneyfrom hi
scar d-
li
nkedaccount,
toa
phonenumberofthebenefici
ary.
Thebenef i
ciar
y/recei
vercant
henwi t
hdrawmoney
fr
om anI MTenabl edATM, wi
thoutusi
ngacar
d,i.
e.
card-
lesswithdrawal.
Thebenef
ici
ary
/recei
verneednotbeacust
omerof
sameBank.
Thewi t
hdrawaldetai
l
sincl
udingsecretcodeare
part
ial
lycommuni cat
edtothebenefi
ciary/r
ecei
ver
onhis/hermobil
ephoneandpar t
ial
lybythe
remitt
er.
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TheimportanceofIMTismult
ifol
d.Onecanuse
theser
viceforanyoft
hesecases:
*
Ther
ecei
verneedsmoneyi
mmedi
atel
y.
*
Ther
ecei
verdoesnothav
eabankaccount
.
*Theremitt
erdoesnotknowt
her
ecei
ver
'sbank
accountdetai
ls.
*Thereceiv
eri
snotwit
hinclosepr
oximi
ty(
to
deli
vercashorsendachequebyhand)
Curr
entl
y,thi
sfaci
li
tyi
sonlyavai
labl
eforint
ra-
bank
tr
ansact
ionsi.
e.fr
om onebankaccount/ATM t
oan
ATM ofthesameBank.
ForATM wit
hdrawalwi
thoutanaccountinthebank
bythebenef
ici
ary,
thepaymentsareatthesame
bank'
sATM.
Whenwewanttoini
ti
ateremitt
ancewit
hr ef
erence
t
obankaccountnumberetc.
,however
,itcanbe
i
nter
-bank.
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Pr
ofi
tabi
li
tyofATMs:
Today,ATMsar enolessthanbranchesi
nthei
r
capabil
it
ytoservi
cecustomers,and,i
nfact
,duet
o
technol
ogicali
mprovements,i
tcansurpass
tradi
ti
onaldeli
ver
ychannelsi
ntermsofcustomer
servi
ce.
However
,theATM verti
calf
orabankneedst
obe
pr
ofi
tabl
eandsustainabl
e.
Bankssavemanpowerandoper at
ionalcost
swhen
customersgetdiv
ertedt
o/opttouseATMsf or
tr
ansacti
ons,l
ikecashwithdr
awal
,chequedeposi
t,
etc.
Studi
esrevealthatcostofcashwit
hdrawalsat
bankbranchesisquitehigh,
whereasthecostof
samecashwi thdrawaltr
ansacti
onatATMsi s
si
gnif
icantl
ylower.
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ForBanks,
ATMspr
ovi
det
hef
oll
owi
ngbenef
it
s:
*
Theyar
eanal
ter
nat
ivet
oext
endedbanki
nghour
s.
*Theyarecheaperiftransacti
onsarel
argein
number ,andconsequentlytheyr
educefoot
fallat
branches.
*
Theyar
eanal
ter
nat
ivet
oopeni
ngnewbr
anches.
*
Theyr
educet
heoper
ati
ngexpensesoft
hebank.
*
Theyhelpbanksavoi
dtr
anspor
tat
ionofcashand
r
educecashhandl
ing.
*Theycanbelocatedatanyconv
enientl
ocat
ioni
n
anyfor
m, v
iz.
,walluni
t,l
obbyuni
torwindowunit
.
*
Theypr
ovi
depubl
ici
tyf
ort
hebanks.
*Theyreli
evet hebankemployeesfr
om r
out
ine
tr
ansactions,sothebanker
scanf ocusmor
eon
analy
ticalandcreati
vework.
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RBIhasf
ormul
atednewATM usagegui
del
inesand
char
ges:
Fr
eet
ransact
ionsi
namont
hatownbank’
sATM:
Locat
ion NoofFr
eeTr
ansact
ion
6Met
roci
ti
es 5Tr
ansact
ion
Non-
Met
roci
ti
es 5Tr
ansact
ion

*
Transact
ionsareincl
usi
veoff
inanci
alandnon-
f
inanci
alt
ransact
ions
6metrocit
iesar
eMumbai,NewDelhi,
Kol
kat
a,
Chennai
,Bengal
uruandHy
derabad.

Fr
eet
ransact
ionsi
namont
hatanot
herBank’
s
ATM:
Locat
ion NoofFr
eeTr
ansact
ion
6Met
roci
ti
es 3Tr
ansact
ion
Non-
Met
roci
ti
es 5Tr
ansact
ion
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Whati
fcust
omerneedt
ouseATM f
ormor
ethan
l
imi
tal
locat
ed:
*From January1,2022customerneedtopay₹21
pertransact
ion(earl
ier₹20)
,af
terf
reeusagel
imi
t
exceed.
Bank’
schar
geswit
honeanot
herf
oral
lowi
ngt
he
useofATM machi
ne:
Theacquir
ingbanksi
nvesti
ngi
nATM i
nfrast
ruct
ure,
shoul
dbeabl et
ogenerat
eenoughr
evenueto
recov
erthecost.
From August1,2021,theIssuingbankspay
i
nt er
changetoacquiri
ngbank, attherateof₹17
(₹15earli
er)f
oreveryfinancialtransact
ionandat
therateof₹6(₹5ear l
ier)forev erynon-
financi
al
transact
ion.
Fi
nanci
alTr
ansact
ion:₹17
Non-
Financi
alTr
ansact
ion:₹6
WhoPay
smoney
:Issui
ngBank
Whogetbenef
it
s:Acqui
ri
ngBank