ATMs–Then and Now
Prof N Natarajan
The latest news is that nearly 95000 ATM’s across the country are yet to be configured to accept and dispense the new notes. This exercise may take weeks. Another piece of news is that Canara Bank has deployed mobile vans to exchange notes.
My memory takes me to 1987 when my bank decided to install the first ATM. There were numerous problems. The first was to obtain a licence from RBI which treated an offsite ATM as a new branch. Foreign banks were not allowed to open new branches or even shift an existing branch to a new area without clearing a whole lot of red tape. Every ATM, even in the branch premises, had to be sanctioned by RBI. Further the Government and RBI’s permission had to be obtained for importing the machine which necessarily involved foreign exchange. RBI preferred foreign banks to pay for the machine in foreign exchange using their accumulations abroad. This was a hurdle too. Finally, an ATM that cost Rs 34 lakhs, a fortune in those days, was procured. Another factor was our overseas Head office’s concern about the justification of the huge capital expenditure. We were unable to ‘prove’ beyond reasonable doubt the viability of a business that did not exist. Our HO reluctantly took our word for it.
Our bank crossed all these hurdles successfully over a period of 12months. Then we were advised that ATMs were akin to human beings in many ways. They could work only in a highly efficient dedicated air-conditioned environment. The ATM’S had to have a pace maker called UPS to maintain regular supply and orderly shutdown when the electricity went off. A standby generator was required for the ATM’s to function if there was extended power failure. They had to be erected on anchor bolts buried deep in concrete to ensure that they were not stolen in the night. The ATM machines had to be on a perfect level and would not tolerate any tilt, right or left. Fire protection was another mandatory requirement. Even with all these addons, the machines would catch cold now and then. Specialist doctors from the supplying firms had to be summoned to diagnose the infection. Our internal quality compliances demanded 24/7/365 operation and 99% uptime.
These requirements meant an even more initial investment and a lot of running costs. Our General Manager Operations was losing his sleep with nightmares. During a siesta, after beer and lunch, he ‘had a dream’ . He knew it was a mirage, yet he wanted to lift his team’s sunken spirits by describing his super- vision. He said the solution was for the bank to set up a widow type ATM. Customers could insert their cards and key in their currency requirements. These would be received by an invisible human teller in a secure room who would then verify the veracity of the demand and pass on the cash to the customer through the money dispensing slit in the window. No explanation had to be given for rejecting a request. This arrangement would not need fail safe clean power or 22 degrees air conditioning. The capital expenditure would be negligible and operating costs only a small fraction of operating an ATM. No special permissions, RBI nods and budgetary compliances would be required. The team had a good laugh and went back to their arduous tasks cheerfully.
Looking back, I get the feeling that the 1978 dream of our General Manager can be translated into action in the present ATM crisis.
The bank branches could have a human ‘hand’ behind every ATM and the size or shape or colour or denomination of the Rupee would simply not matter!
What do you say to a semi-automated teller machine SATM?