The bank's move comes at a time when it has been expanding its branch network and geographical reach.
HDFC Bank, India's second largest private sector lender, has rationalised the number of automated teller machine network by 276 in the July-September quarter.
The bank has reduced the number of ATMs to 11,686 at the end of the quarter ended June.
Paresh Sukthankar, deputy managing director, HDFC Bank, said, “We continue to add ATMs in certain locations but we have also been simultaneously rationalising and reviewing the existing ATMs across multiple parameters. . . so we look at things like vintage of deployment, number of transactions, feedback from front-end branches, opportunities for relocating, etc.
So, as a part of this exercise, we have rationalised a few hundred ATMs before we either redeploy them or in some cases pull them completely.”
Sukthankar added there has been a change in customer behaviour.
Now, more people are comfortable using their debit cards as plastic money instead of withdrawing money from ATMs.
Besides, people are increasingly making payments in the digital mode via applications such as PayZapp and Chillar.
The bank's move comes at a time when it has been expanding its branch network and geographical reach.
Prior to the quarter ended September, the lender had reduced its ATM count in Jaunary-March 2014, quarter.
The ATM network had come down to 11,256 from 11,473 in the quarter ended December, 2013.
The management had said the cost of running ATMs was going up.
To tide over the problem, some lenders have been asking for an increase in interchange fee (the amount one bank charges another if the latter's consumer uses the ATM of the non-home bank).
However, not all banks are in favour of this hike.
According to bankers, the public sector lenders have been working to keep the interchange fee low whereas, on the other hand, the private sector banks have been lobbying for an increase.
This is because state-run banks are generally the issuer ones (which issue the card) and the private banks in most cases are the acquirer bank (the non-home bank ATM the consumer uses) and therefore a hike in interchange fee would benefit them unlike public sector banks.
The interchange fee has remained unchanged at Rs 15 plus service tax for financial transactions.
