Close some ATMs, but don’t sacrifice customer interest

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Since Independence, from the customer point of view, nothing revolutionised the Indian banking industry as ATMs did. Introduced in the late 1980s, these machines grew in quantum jumps at the turn of the century, riding on the convenience that customers derived from them. Due to the popularity of phone banking and online payments, banks are gradually closing down ATMs, which, in some areas, are attracting fewer footfalls.

However, in the rush to shut down ATMs, banks should not lose sight of the fact that they play a significant role in financial inclusion, which is a national priority for the country. Between August 2014 and March 31, 2021 no fewer than 30.9 crore Rupay debit cum ATM cards were issued under the Jan Dhan accounts that constitute an important part of the flagship programme of the government. The tentative new poor customer might hesitate to walk into a bank branch, where he may face discrimination for his appearance, but there is no such apprehension at an ATM counter.

The convenience of ATM transactions is not limited to the bottom of the pyramid alone. Think of the elderly person who cannot visit the branch of his bank to order a new chequebook or withdraw cash from his pension account. Customer convenience is a factor that cannot be mentioned in a profit and loss statement but does influence the figures mentioned in them. Moreover, ATMs help bank authorities to manage operations with fewer employees, and therefore, save costs at a branch level.

The Reserve Bank of India should also see to it that overenthusiastic banks do not close down ATMs at will. Unplanned shutdowns might suddenly leave customers, most of whom have not visited branches in a long time, in the lurch. ATMs can be phased out but only in a carefully calibrated manner without sacrificing customer convenience.