In order to cut down on long queues outside its ATMs in urban and semi-urban areas, State Bank of India plans to ramp up its ATM network by 8,000-10,000 every year over the next three years.
Currently, India's biggest bank and its five associate banks have a network of 25,444 ATMs, accounting for 32 per cent of the 78,959 ATMs (as of June-end 2011) of 57 banks which are linked to the National Financial Switch.
By going in for massive ATM network expansion, the bank is also eyeing the customers of other banks who could transact at its ATMs, thereby earning fee income.
As a group, SBI and its associate banks have issued about 8 crore debit cards so far and the average number of cards per ATM currently is around 3,000.
“In our case, the number of cards per ATM, currently at 2,500-3,000, is huge. I understand that 1,500 cards per ATM is an acceptable level for ATM transactions to be efficient. So, to that extent we have to increase the number of ATMs to bring down the ratio from 2,500-3,000 to 1,500 cards per ATM,” said Mr A. Krishna Kumar, Managing Director, SBI.
Explaining the rationale for rapid ATM expansion, he said, in semi-urban and urban areas sometimes there are long queues in front of SBI ATMs because the single ATM is not able to handle so much traffic.
“A person takes two-three minutes to complete a transaction. At some ATMs, we have 350-400 transactions per day. So, it becomes very difficult to manage the queues. So, what we are trying is to install a second or a third ATM in the same booth to manage the queues and get more transactions on our ATMs,” he said.
Because of the queues, people are going to other bank ATMs, resulting in SBI having to pay other banks.The problem is not so much in metros, as it is in urban and semi-urban areas.
SBI plans to open around 1,000 branches this year, of which at least 50 per cent will be in unbanked rural areas. The bank will monitor the branch expansion closely to ensure that there is some focus on unbanked rural areas.
Rationalising Charges
SBI is considering rationalising charges on various products and services. Following customer feedback that charging Rs 10 for updating passbook at any branch, other than the branch where the account is maintained, is unfair, the bank is likely to take a decision which is favourable to the customer.
According to Mr Krishna Kumar, “Levying charges makes very good sense for the bottomline, but then we also have a social responsibility. We are a bank catering to the common man in a small village or a town. We will levy charges where it is required but at the same time we are looking to rationalise the charges.”