A new bank from 1st Oct
Two days from now, India will have another new bank – IDFC Bank. Come 1st October and the Bank will start with a bang – 23 branches out of which 15 branches will be in rural India. These rural branches will be known as Bharat Bank. The aim of the bank – to have a total branch network of around 60 out of which 40 will be in rural areas.
This bank promises to be different and is nurturing the motto of being “hatke bank” or “unbank”. It also plans to keep its costs low and a step in that direction is that it is looking at the option of not having its own ATM. The bank rightly feels that there is today a saturation of ATMs and then there is the cost of maintaining these machines. So with no ATMs how will the bank function? It is looking at the option of allowing transactions at rivals’ ATMs free for customers.
Maybe the bank will look at the option of white-label ATMs. White label means, an ATM that does not have any label of any bank. They function just the same way as any other bank-run ATM. It will serve customers of all the banks.
There are three parties involved in WLAs:
- Non-bank corporate entity which is to set up, own and operate the WLA
- Authorized ATM network operators/ card payment network operators like RuPay, Visa or MasterCard
- Sponsor bank for cash management, funds settlement as well as customer grievance redressal.
An existing bank can save huge costs on account of setting up and operating ATMs. On an average, a bank incurs capital expenditure of Rs 3-4 lakh per ATM buying in addition to operation costs of Rs 40,000-50,000 per month per ATM depending on rent, security and electricity.