ATM Network

The ATM network is an interbank network also called an ATM consortium. This network allows individuals to use ATM cards or debit cards at any of the ATMs that specifically come under the network. The cards can be used for performing day to day ATM transactions or other banking operations as per the permissions and eligibility. A few specific functions such as fund transfer, bill payments, etc. are not available at every ATM as these can be accessed at one’s own bank ATM only. In the case of special permissions, such functions attract charges as per the governing bank’s regulations.

ATM consortium or ATM network in India is built on five partner establishments, viz. NFS (National Financial Switch), BANCS (Banks ATM Network and Customer Services), MITR (Multilateral Interbank Network), Cashnet, and CashTree. These systems have several banks in their networks and the systems are interconnected with each other. This allows customers to use any bank’s ATM without worrying about the ATM network.

A brief description of ATM networks involved in Indian banking sector is given here:

• NFS: National Financial Switch or NFS was designed and deployed by Institute of Development and Research in Banking Technology (IDRBT) in 2004. NFS is managed by NPCI (National Payments Corporation of India). This is the largest shared ATM network in the country that focuses on nationwide convenient banking. The network is connected through 2,36,190 ATMs in the country. In this network, 99 direct member banks have 2,16,952 ATMs, 692, sub-member banks have 4,058 ATMs, 56 RRB members have 1,034 ATMs, and 8 white label ATM providers have 14,146 ATMs. The basic free of cost services offered by the ATMs under NFS ATM network include cash withdrawal, balance enquiry, PIN change and Mini-Statement. Other value-added services offered by NFS ATM network are inter-operable, instant fund transfer, 24/7 availability, paper-less transactions, fund management, and transaction limits.
• BANCS: Banks ATM Network and Customer Services or BANCS is another ATM network in the country that was launched in the same year as NFS in 2004. The network is managed by an advisory board of member banks. BANCS can also be called the successor of Swadhan ATM network. BANCS network uses software provided by IBM, Solaris and Oracle. The system has seen a lot of modifications in terms of management. At first, it was supported by ISC (India Switch Company) and later by eFunds in 2005. Currently, it is being managed by Fidelity National Information Services. BANCS have 13 member banks including Bank of Maharashtra, Bank of Bahrain and Kuwait, Greater Bombay Co-Op Bank, Centurion Bank, Central Bank of India, UTI, Punjab and Sind Bank, IDBI, RBL Bank, SBI Commercial and International Bank, Cosmos Bank, Air-Corporation Employees Co-Op Bank, and Saraswat Bank.
• MITR: MITR is a multilateral interbank network that was launched in 2003. The network consists of 6 member banks including Punjab National Bank (PNB), Oriental Bank of Commerce (OBC), Indian Bank, UCO Bank, Karur Vysya Bank, and Indslnd Bank. PNB also acts as a settlement bank for this network while the state-of-the-art ATM switching technology is provided by a Chennai-based company, Financial Software Solutions Pvt. Ltd. Recent cyber-attack caused substantial damage to this network as several ATMs had to be closed down for security reasons.
• Cashnet: Euronet Services India Pvt. Ltd., a subsidiary of Euronet Worldwide manages the Cashnet ATM network. It was launched in 2003 as the country’s first independent nationwide shared ATM network. Euronet acts as a central switching and processing centre by building a host-to-host connection for each member bank. It facilitates settlements on daily basis between participant banks and provides settlement reports. Cashnet also provides switching and gateway services to international card organisations such as Visa, MasterCard, Amex, and Diner’s Club.
• CashTree: This is a relatively small ATM network in the country with approx. 700 ATMs and 6 member banks. The member banks are Bank of India, Indian Bank, United Bank of India, Syndicate Bank, and Dena Bank.

All ATM networks partner with each other to make the banking process smooth for customers. Each has its own set of charges that it either levies on the other or in some cases on the customer.

Different banks charge their customers as per specific costs and regulations for ATM usage. Some banks offer free transactions on their ATMs and a small fee for using other bank’s ATM. On the other hand, a number of banks offer limited free transactions both on own ATMs and other ATMs. The transactions beyond this limit attract charges as agreed between the interbank networks.

The different ATM charges levied by the banks are not only because of the cost factor. It largely depends on the ATM network system. For instance, ATM charges levied by NFS and BANCS can be different from each other. Member banks feel that they must bridge this gap to streamline the charges. This is because the customer does not know the complicated interbank ATM network that is allowing him to make the cash withdrawals or undertake other transactions. He or she will only pay the charges as directed by their bank and RBI regulations regardless to the nature of ATM network. In such situations, ATM networks have no option but to work with each other in cooperation and perform the settlements as per their mutual agreements.