Lease-an-ATM: Banks Now Have An Infrastructure Option

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New Delhi: : In what could be the first of its kind outsourcing service offering in India, the Chennai-based Rs 100 crore HMA group has entered into the business of providing automated teller machines (ATMs) infrastructure to banks on lease.

The new business being rolled out through a group firm, India Switch Company, would involve setting up a network of ATMs across the country and providing it to banks on lease along with support services like cash, real estate and security management.

In an exclusive interview with eFE, HMA group promoter Harish K Murthi said the group had already bagged an order from the Bank of India (BoI) to install and operate 225 ATMs in 9 cities over a period of three years.

The contract is expected to generate close to Rs 100 crore revenue to the company in three years, he added.

“We are now pitching for similar orders from other nationalised and co-operative banks. Banks are quite keen to outsource their ATM requirements as it saves a lot of trouble of managing infrastructure, cash transfer and security operations,” said Mr Murthi.

HMA group started selling Automated Teller Machines in 1988 as a distributor of Diebold Inc of the US in India and later floated a 50:50 joint venture, Diebold HMA in 1992.

The joint venture later formed two other firms, India Switch Company for providing solutions and services in retail banking space and HMA Starware Limited for software development for the same sector.

Mr Murthi said the company would own all the ATMs and infrastructure and provide the facilities to banks on a contract basis.

The bills for each ATM (for cash withdrawn by the bak customers) will be generated at the end of the day and sent to the bank.

The company will also explore the possibility of offering ATM infrastructure to multiple banks where one ATM machine could be used by the customers of different banks.

“This will suit small banks which are not able to make big investments in setting up exclusive ATMs. We have already deployed a shared payment network systems under India Switch which will help us manage cash transactions for multiple banks,” Mr Murthi said.