SBI, UCO Bank, Allahabad, United Bank join hands to open ATMs, cut costs

Public Sector Banks (PSBs) will join hands to open over 65,000 Automated Teller Machines (ATMs) this fiscal that will bring down the cost of operations for all the member banks by at least 30%.

One of the member banks will float a single tender on behalf of others for every region. For instance, State Bank of India (SBI) has invited tenders on behalf of UCO Bank, Allahabad Bank and United Bank of India (UBI) to set up 6,099 ATMs in Uttar Pradesh.

The move will help banks reduce transaction cost as the number of ATMs in a particular geography will increase substantially, giving them more bargaining power in settling transaction charges with the vendors. However, it will result in lower margin for ATM vendors.

The unified approach in installing ATMs follows an earlier directive from the finance ministry which wanted banks to reduce transaction cost – the price they pay to vendors for running the machines.

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