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NPCI wants to make cash deposit machines interoperable


The National Payments Corporation of India (NPCI) is looking to make cash deposit machines interoperable. Currently, the NPCI has three banks – Andhra Bank, Union Bank of India and the Punjab and Maharashtra Co-op bank – have signed on for a pilot by the NPCI and it added that more banks will be joining in.

Now, customer of these banks can deposit cash in any of these banks’ accounts through ATMs. This is done through the National Financial Switch (NFS), India’s largest network of shared and interconnected ATMs developed by the Institute for Development and Research in Banking Technology and managed by the NPCI. As of July 2016, there are 226,816 ATMs in NFS’ network which includes commercial banks, co-operative banks, regional rural banks and white label ATM operators.

The proposal to link all cash deposit machines was first expressed by the Reserve Bank of India, as indicated by this Press Trust of India report.

Cash usage in India continues to be dominant and according to the Reserve Bank of India 90% of transactions are still done through cash and it issued Rs 13,00,000 crore  in notes in FY 2013-14. A recent paper from the RBI also said that debit card usage at ATMs is quite high. From April 2015 to December 2015, the usage of debit cards at ATMs accounted for around 88% of the total volume and around 94% of total value of debit card transactions. Usage of debit cards at POS machines accounts for only around 12% of total volume and 6% of total value of debit card transactions.

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Mobile banking on NFS ATMs: In December 2015, the Reserve Bank of India (RBI) asked all banks part of the NFS to make changes to their ATMs so that they can allow customers to register for mobile banking. The RBI also said that all participating banks in the NFS have to make changes to their ATMs by March 2016 to allow registration for mobile banking. “In addition to the above, banks should also strive to facilitate customer registration for mobile banking through other channels including internet banking, IVR, phone banking,” the RBI added.

More services on ATMs: To provide more operational freedom for banks, the RBI said that banks can now offer all their products and services through their off-site ATMs in January. Off-site ATMs are machines that are set up on a standalone basis and not inside a branch. “Banks are now free to offer all their products and services through the ATM channels provided the technology permits the same, and adequate checks are put in place to prevent the channel from being misused to perpetuate frauds on the banks/other genuine customers,” the RBI added.

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