Banks in India increasingly are considering deploying so-called micro-ATMs to help increase their customer bases in rural areas.

The functions micro-ATMs support are similar to those provided by traditional machines, but the devices are smaller in size. And because they are manufactured locally at about half the cost of traditional ATMs, they are more suitable for India’s vast rural sector, where many more ATMs are needed than in urban areas, various sources tell PaymentsSource.

“These machines can be in the form of hand-held reader or even smaller versions of a normal ATM,” an official from the alternate channels department of Mumbai-based State Bank of India, tells PaymentsSource. “The next surge is toward smaller dispensers, which can also be accessed with biometric smart cards.”

Bangalore-based Verity technologies Pvt. Ltd. and Mumbai-based Anand Technologies Pvt. Ltd. are two of the main providers of these ATMs.

Business correspondents for several banks and financial organizations in India already have begun using the hand-held readers in rural India, including representatives from Purvanchal Gramin Bank in the Indian state of Uttar Pradesh (see story).

Union Bank of India Ltd. recently announced plans to work with Bharat Petroleum Corp. to install smaller cash dispensers that accept magnetic stripe cards at outlets across India.

State Bank of India also plans to install smaller ATMs, but no specific rollout plans have been determined, the official says. “These will be accessible by biometric smart cards and will be installed in parts of rural India with low financial inclusion levels,” he says.

Last year, the Reserve Bank of India had asked all banks to submit their plans for targeting unbanked areas in India to broaden their customer bases by March 2012.


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