BUSINESS

5 PSBs to share ATM network

CHENNAI APRIL 9. Five public sector banks have come together to offer a shared ATM (automatic teller machines) network by pooling their IT (information technology) resources.

The objective is to pare transaction cost and facilitate their customers to access more ATMs across the country.

The five banks are: Bank of India, Indian Bank, Syndicate Bank, United Bank of India and Punjab National Bank.

Four of them today signed a memorandum of understanding for sharing the ATM network. Punjab National Bank is expected to initial the MoU soon.

The proposed shared ATM network is more likely to be christened `B5 or Bank 5'. The Chennai-based India Switch Company (P) Ltd. will be the network service provider. It will soon initiate the process of linking the individual ATM switches of these banks with a central switch. Bank of India will manage the settlement system of the shared ATM network.

The ATM network sharing initiative of these banks comes even as the IBA (Indian Banks Association)-sponsored Swadhan network is being wound up for various reasons.

The IBA network will go out of action by the end of the current year.

D. Krishnamurthy, General Manager (IT resources), Bank of India, told The Hindu that the new network would become operational from May 1. Customers of these banks would get free access to the shared ATM network initially. He indicated that they might be charged a nominal (less than Rs. 5 per transaction) fee later on. He, however, made it clear that it would be only very minimal. At present, customers are charged Rs. 25 per transaction for using the Swadhan ATM network.

Mr. Krishnamurthy said the network sharing would obviate the need for individual banks to make heavy capital investment on the ATM expansion programme. He expected more nationalised banks to join the proposed network. He also said the proposed network would also facilitate the use of debit/credit cards in point of sale-based deals, quite in vogue in advanced countries.