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Religious gatherings in the country appear to have offered banks an opportunity to increase transaction volumes in their automated teller machines (ATMs). Private sector banks have started introducing mobile ATMs that are migrating from one religious fair to another throughout the year.
HDFC Bank, the second largest private lender in the country, has sent its mobile ATM to the Maha Kumbh Mela in Allahabad this year. It is estimated over 100 million people will attend this year's Maha Kumbh Mela, which began last month.
"This is the first time we have sent a mobile ATM to Kumbh. It was impossible to rent space and set up our ATM there. The transaction volumes have been phenomenal," said Birendra Sahu, senior executive vice-president for direct banking channels and premier banking at HDFC Bank.
Kerala-based Federal Bank stationed a couple of portable ATMs near Sabarimala temple during the last festival season when thousands of devotees visited the place. "Mobile ATMs have high utilisation rate. You can move the ATMs from these places when there is no festival and footfalls are low," said Shyam Srinivasan, managing director and chief executive of Federal Bank.
Typically, a mobile ATM is put on a van that moves from one location to another. When the money in the ATM gets exhausted, the nearest cash-in-transit agency of the bank deposits additional funds in the machine. However, a few banks are still reluctant to introduce portable ATMs because of its maintenance cost. Bankers estimate that the maintenance cost of mobile ATMs is at least 25-30 per cent more than that of traditional ATMs. "The bank has to incur expenses for the upkeep of the ATM as well as the van. It also has to ensure that there is adequate security," a senior executive with a large private bank said.
But many bankers believe the transaction volumes in portable ATMs mitigate the high maintenance cost in the long-run. "It's a function of the volume. These ATMs attract very high footfalls. So, in the long-run if you consider the utilisation rate, such ATMs are not expensive at all," HDFC Bank's Sahu said.