A close look at RBI data on ATMs deployed by foreign banks across geographies reveal a fall of almost 18 per cent in three years between 2014 and 2017. The actual number of terminals fell to 934 in the quarter to September from 995 in the year-ago quarter.
This number was 1,141 in September of 2014. Having closed their retail operations, banks like the UK-based Royal Bank of Scotland and South African FirstRand Bank have also shut their ATMs. Larger lenders like Standard Chartered, Citibank and HSBC have also reduced their ATM count.
While Standard Chartered has reduced its ATM network to 223 from 279 in 2014, Citi Bank reduced it to 549 from 577 during the same period and HSBC Bank reduced it to 100 from 143, RBI numbers showed.
During the same period, other banks have gone on to expand their ATM network. Public sector banks, which deployed 1.2 lakh terminals in 2014, now have 1.4 lakh terminals. Even private sector banks have deployed 59,365 terminals in September 2017 against 50,000 terminals three years ago.
"Yes, we have also seen a fall in the number of ATM orders from foreign banks and we believe that is mainly due to stress that these banks are under globally," said Loney Antony, managing director of Hitachi Payments, which deploys and manages ATMs in the country. "With low interchange regime in India, they find it more profitable to leverage the ATM network of other banks for their customers."
Bankers say in the first few years, foreign banks were going big on ATMs as it was a major product differentiator in comparison to normal branches of other banks, but that type of an advantage has died with other banks catching up on ATM deployments. Also, initially with the regulatory restrictions on branch expansion, ATMs were a more favourable means of reaching out to customers. Now with everything going digital, banks are relying more on smartphones to attract customers.
"The client base for foreign banks is different. They are tech savvy. ATMs have a cost to it, rentals, machine leases and network charges. Each ATM costs ?1 lakh per month. So, if customers don't use it, it does not break even and is a cost burden," said Rohit Wahi, India CEO at FirstRand Bank. Foreign lenders with a thin network like Singapore-based DBS Bank are promoting digital banking in a big way.