The wait outside public sector bank ATMs is set to get longer with the banks putting on hold plans to install new cash dispensing machines in the wake of a government decision to centralize procurement.
While the finance ministry has informed banks about its intent to go for a common purchase contract for all public sector players, it is yet to firm up the modalities, including the agency that will undertake the procurement. In addition, a bank chief said that the government is looking to put in place a mechanism through which banks can mutually decide the locations for new machines.
ATMs, while it hovers between 30% and 40% for the new generation private sector players.
India is probably the largest ATM buyer with public sector banks expected to set up close to 20,000 machines this year. State Bank of India alone had planned to add 10,000 new ATMs this year, but is going slow following the policy review by the government. Other banks too have put fresh orders on hold.
Senior banks executives said that a centralized procurement would help negotiate better prices. A large bank such as SBI pays around Rs 4 lakh per ATM, while those with a smaller requirement end up paying close to Rs 6 lakh, an executive said. A common purchase platform may help lower the cost for a big player like SBI, bankers said.
Other banks too have put fresh orders on hold. Banks executives said that a centralized procurement would help negotiate better prices. A large bank such as SBI pays around Rs 4 lakh per ATM, while those with a smaller requirement end up paying close to Rs 6 lakh, an executive said. A common purchase platform may help lower the cost for a big player like SBI, bankers said.
On the flip side, they said, it could take up to six months to put in place the new mechanism for purchases and order the next lot of machines.
India is probably the largest ATM buyer with public sector banks expected to set up close to 20,000 machines this year. State Bank of India alone had planned to add 10,000 new ATMs this year, but is going slow following the policy review by the government. Other banks too have put fresh orders on hold.
Senior banks executives said that a centralized procurement would help negotiate better prices. A large bank such as SBI pays around Rs 4 lakh per ATM, while those with a smaller requirement end up paying close to Rs 6 lakh, an executive said. A common purchase platform may help lower the cost for a big player like SBI, bankers said.
Other banks too have put fresh orders on hold. Banks executives said that a centralized procurement would help negotiate better prices. A large bank such as SBI pays around Rs 4 lakh per ATM, while those with a smaller requirement end up paying close to Rs 6 lakh, an executive said. A common purchase platform may help lower the cost for a big player like SBI, bankers said.
On the flip side, they said, it could take up to six months to put in place the new mechanism for purchases and order the next lot of machines.
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