Following reforms in the early nineties, the banking sector was liberalised and competition brought in many technological advancements. New delivery channels to provide services such as automated teller machines, Internet banking and mobile banking became operational. Customers got to experience enjoyable banking technologies like never before.

The automated teller machines (ATMs) have come to represent a very important face of banking services in India. The first ATM was made operational in India in 1987 by HSBC. Since then, due to their cost advantages to banks as also the convenience of 24-hour operations for customers, their numbers have mushroomed to over 1.16 lakh as of April 2013 and continue to grow.

Even small towns today flaunt ATMs. The enabling provision, by the RBI, of using one’s ATM-cum-debit cards at any ATM (for a limited number of transactions) has further propelled the use of automated teller machines. The latest concept envisaged in this space is the white label ATM (ATM operated by non-bank entities).

Complaints galore

Maintaining service quality is of paramount importance to satisfy customers. Of late, while there is increase in the number of ATMs, the quality of services has not kept pace.

One only needs to visit an ATM on the last or the first day of the month. One is invariably greeted with “ATM out of cash” or “ATM temporarily out of service” messages. Even on other days one can observe many dysfunctional ATMs, prompting customers to go in search of the next nearest system.

During the initial years, visiting an ATM was a pleasant experience — one enjoyed air-conditioned comfort and a general clean ambience. At many ATMs today, the air-conditioners do not work and some of the premises look very cluttered with print-outs scattered everywhere (for which the ATM users are equally to blame). Many a time the security guard is missing and one gets to see only the empty chair. In addition to all these, at many ATMs there are complaints of cards vanishing into the machine. Now, ATMs immediately release the cards after insertion, which has reduced this type of complaint.

Where are the crisp notes?

Another complaint banks need to attend to is that of accounts getting debited but money not getting released. Also, there are complaints of failed transactions due to power outages and unknown reasons. Till a few years ago, while withdrawing currency at ATMs, one was assured of fresh and crisp notes. Today this is not the case.

In the absence of an optimal level of transaction volume, ATMs become an expensive proposition for banks as they need to spend on machine maintenance, security, air-conditioning, v-sat network, cash transportation, house-keeping and stationery.

Banks should take a call on closing down unviable ATMs but maintain viable ones well. They need to recreate the pleasant experience one had using ATMs a few years ago.

(The author is with the Xavier Institute of Management and Entrepreneurship, Bangalore.)

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