Five leading public sector banks, under the initiative of Bank of India, are setting up the country's first national ATM network project, christened Bancs -- Bank ATM network customer service.
These banks, strong in different parts of India, are combining their ATM network to cover the entire country. BoI is strong in the west, Punjab National Bank in north, Syndicate Bank and Indian Bank in south and Uco Bank in east.
BoI will be the settlement bank, with India Switch Company providing the necessary technology.
ISC chairman Harish K Murthi said: "ISC will offer shared infrastructure management services to the five banks based on the transaction model or whatever the banks work out."
Bank of India chairman K V Krishnamurhty said the main objective is to share the cost.
"We are outsourcing our entire technology needs. Some banks have shown interest in joining hands with us to set up a nationwide network. This will lead to huge cost savings for all banks," he said.
This is the second time banks have decided to get together to invest in a shared network model, the first being Swadhan -- the shared payment network service of Indian Banks Association.
Swadhan is a network of various banks' ATMs in Mumbai city, including those of private, public and foreign banks.
Though senior bank officials deny that Bancs is a break away from Swadhan, they admit that the key advantage of this model is that the choice of banks are those that have gone in for computerisation and have online ATMs.
Under Swadhan, not all banks were of similar size or strength. Some were fully computerised, while others were not necessarily tech-savvy, and do not have online operations.
As a result, a customer's account is not immediately debited. Krishnamurthy denied that they are breaking away from Swadhan. "There is no clash between the two. Swadhan can remain and our network can run at a parallel level," he said.
Bancs will be a totally online model, initially with a network of 500-odd ATMs across the country, which will grow to about 1,000 ATMs.
BoI has got ISC to install 225 ATMs over three years, with over 100 already in place. This combined with the growing network of the other four banks will be able to compete with that of State Bank of India's 1,000-odd ATMs and ICICI Bank's 1,150 ATMs.
ISC is providing BoI a total retail infrastructure management service, being the bank to go for a total outsourcing solution.
"The latest initiative banks have undertaken is to go for total outsourcing. Here, we install the machine, run it, link it to the centralised network and even look after rentals," said Murthi.
© 2025 Rediff.com -