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SBI set to ink ATM deals with HDFC Bank, ICICI Bank
BS Banking Bureau in Mumbai |
October 04, 2003 10:08 IST
State Bank of India, is tying up with two private sector peers, HDFC Bank and ICICI Bank, for sharing the ATM network.
The public sector giant is opening its ATM network for the first time to any other bank or a network.
The agreement between SBI and the two banks will be signed next week. SBI, along with its associate banks has the largest network of over 2,000 ATMs in the country.
All the ATMs of SBI and its associate banks are interconnected through a single switch. ICICI Bank has around 1,700 ATMs while HDFC Bank has 830 ATMs.
An SBI customer will now be able to use more than 4,500 ATMs across the country, which is larger than any multi-bank network.
The country now has four multilateral ATM networks -- IDBI Bank's Cashnet, Bank of India's Cashtree, PNB's Mitr and Canara Bank's CashOnline.
Of these, only Cashnet has kicked off till now. Meantime, the Institute for Development and Research in Banking Technology, a Reserve Bank of India arm, is also looking at coming up with a national switch.
Sources said UTI Bank is also in talks with SBI, but no agreement of any kind has been reached yet. According to sources, both HDFC Bank and ICICI Bank are likely to charge their customers for the use of SBI ATMs.
However these charges would be lower than what is charged by MasterCard and Visa for debit card usage at ATMs of other banks. The advantage for the private sector banks is much greater coverage.
HDFC Bank and ICICI Bank have ATMs in more than 100 cities, while SBI has the machines in 500 cities and towns.
SBI's customers will benefit as both HDFC Bank and ICICI Bank have a larger ratio of off-site ATMs. ICICI Bank has a debit card base of around 4 million, while HDFC Bank has a debit card base of 2 million.
For the bigger banks with larger ATMs, multilateral and bilateral networks help in increasing the card acceptance. Banks with a larger card base need to tie up with banks more ATMs as this would help their customer base use more ATMs.
According to sources, the ATM network, which has any of these three banks as a member will have the highest amount of ATMs in the country.
"These banks did not want to open their networks as there was a feeling that the other banks with a smaller ATM network would gain more from the alliance. These banks already have large enough ATM networks for their customers and have been eyeing further expansion. This makes them very attractive for suitors," said sources.