Suryoday Bank decides to shut down own ATMs

Suryoday Small Finance Bank has decided to close down its 26 automated teller machines, giving customers the option to use their debit cards on ATMs of other banks, becoming the first domestic lender to completely do away with such machines.

The small finance bank is now formulating a strategy where it would offer its customers 5-7 transactions free per month when they use the ATM network of other banks to withdraw cash.

“We realised that far too many customers were not using our ATMs, we could not make it a profit centre, hence we decided that we give customers free transactions on other bank ATMs rather than continuing to keep these machines,” said R Baskar Babu, MD of Suryoday Small Finance Bank.

The bank is currently analysing ATM usage data in which it could offer 5-7 free transactions for using other bank ATM services.

Banks have been slowly reducing ATM presence as they operationalise overall costs.

At the end of July, there were 213,000 ATMs in the country, up from 209,000 at the same time last year, a meagre growth of 1.5%. On the flip side, the micro-ATMs have grown to 474,000 as against 305,000 in July last year, a rise of over 55%. Meanwhile, cash withdrawals stood at ₹2.5 lakh crore.

On Tuesday, Suryoday informed its customers of its decision to discontinue ATMs.

“Due to operational reasons, Suryoday Bank ATMs will be discontinued with effect from 1st Oct 2021. However, you can continue to use your Suryoday Bank ATM/debit card at any other bank’s ATM for your cash withdrawal requirements,” the message sent to customers read.

The bank will be focussing on strengthening its doorstep banking services, digital offerings and business correspondent network. It presently has a network of more than 5,000 business correspondents, which is expected to get scaled up substantially. The bank also has more than 500 branches.

“Cash withdrawals have come down substantially, our large segment of microfinance customers use micro-ATMs to withdraw cash hence we will be strengthening that network,” Babu said. “We don’t need to build our own network now, we can just collaborate and use services for a fee as financial systems are increasingly becoming interoperable.”

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