Post offices to issue ATM-cum-debit cards for savings account holders | Business Line

Post offices to issue ATM-cum-debit cards for savings account holders | Business Line

Making services to clientele more broad-based and customer-friendly is a
welcome move from the Department of Posts. However, the proposal to prescribe a
fee for issue of ATM or debit card to the Post Office savings bank account
holder may end up in making the scheme a non-starter.

It is common knowledge
that by encouraging use of ATM cards, there will be savings in man hours for
post offices as account-holders will not queue up at counters for withdrawal of
small amounts of cash (upto the limits allowed for ATM withdrawals). The
costing methodology for arriving at profit/losses in ATM maintenance  by banks and post offices should factor in inter alia (a) the low interest paid on
Savings Bank accounts from which ATM withdrawals are made and (b) the savings
in costs- man-hours, stationery and so on- when transactions are managed
through machines, and even if initially it results in losses on account of high
expenditure for installation of machines etc. this should be met from the
normal budget of the organisation and recovery through fee should not be an

Another aspect Reserve
Bank of India and banks should look into is the need for several ATMs in the
same locality or sometimes in the same shopping area, maintained by different
banks. As the present infrastructure and technology for ATMs do not leave much
scope for ‘competition’ among service providers, pooling of resources and
having ATMs based on  need  could be thought of. Where ATMs are working
within short distances, say 100 meters or so, bringing them together under one
shelter will save costs on rentals and security.

M G Warrier,


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