State Bank of India has agreed to outsource the management of some automated teller machines.
The Mumbai banking company, India's largest, operates 1,200 ATMs throughout the country. It said last week that it would hand off network management duties for 500 of its ATMs to the telecommunications firm and broadband operator Tata Communications Ltd. and the payments technology vendor C-Edge Technologies, both of India.
Weeks ago the Reserve Bank of India, the country's central bank, mandated that Indian financial companies offer free ATM withdrawals to their own customers who use debit cards.
Banks can still earn surcharge revenue from noncustomers who use their ATMs, which will likely prompt banks to expand their ATM networks, said Prathima Rajan, an analyst based in India with the Boston market research company Celent.
"Many banks have adopted the pay-per-transaction model, as that works out to be more feasible for banks," Rajan said. Surcharge fees have "generated a new revenue stream for the banks who have installed a large number of ATMs across the country."
Tata and C-Edge confirmed the contract but would not discuss their ATM management operations.
Source: http://www.americanbanker.com/article.html?id=20090511XL4UU2HO
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