Arguing against the introduction of more third-party ATMs in India, HDFC Bank Ltd. says it does not want to slow the rollout of its own teller machines as the central bank pushes for deployment of nonbank white-label ATMs.
The Reserve Bank of India contends enabling nonbanking firms to set up white-label ATMs will help increase access to financial services throughout the country (see story).
However, Rahul Bhagat, head of direct banking channels at Mumbai-based HDFC, said at a press conference in Mumbai that the bank would not cut its ATM rollout target as a result of the central bank’s actions regarding white-label machine deployments.
Bhagat was responding to a question over concerns that banks would now slow their ATM expansion in locations where white-label ATMs are set up.
HDFC deploys about 7,000 ATMs, and the bank sees no need to back down from its plans to deploy more machines, Bhagat said, declining to specify the bank’s rollout target.
“About 50% of all transactions at our existing ATMs are done by non-HDFC Bank accountholders; that results in good fee income,” he said. “This fee income takes care of installation costs.”
For a bank, ATMs provide a way to differentiate itself from other institutions, Bhagat added. The central bank allowing nonbanks to deploy white-label ATMs will cause banks to lose that differentiation, he said.
Indian banks deploy about 75,000 ATMs, but they are unable to cover even 50% of the country’s population, a major portion of which lives in smaller towns and villages, according to data from the Reserve Bank of India. At least twice that number of ATMs still is needed to provide a majority of India’s population access to the machines, the central bank contends.
What do you think about this? Send us your feedback. Click Here.