SBI thrust on ATM expansion: plans 5,000 new outlets this year

The focus on automated teller machines or cash dispensers is aimed at helping improve the debit-card-to-ATM ratio for the bank; and may also help it save money on ATM interchange fees.

"We are planning to add about 3,000-5,000 ATMs this fiscal," the government-owned SBI's managing director for national banking A Krishna Kumar told reporters on the sidelines of a banking event in Mumbai.

He said the number could go up, as it is the availability of machines that is the biggest issue when it comes to increasing the ATM network.

The bank closed FY14 with 43,515 ATMs and in spite of the large network, had paid an interchange fee of Rs991 crore to other banks, as the number of its customers using other bank ATMs was more than customers of other banks making use of the SBI network.

Kumar said this is because the SBI's ratio of ATM use for every debit card is 1:2,500 as against the 1,500-1,700 for other banks, due to which queues elongate outside its ATMs and customers - who enjoy five free transactions at present - go to other banks' ATMs located nearby to save time.

On the pricing for transacting at ATMs, Kumar said the Indian Banks' Association, which represents bank managements, had written to the Reserve Bank of India seeking charging customers for every transaction in the large cities, and continuing with free transactions in the semi-urban and rural towns.

Recentlhy, SBI chairperson Arundhati Bhattacharya had said she favoured charging customers for ATM use as it was unsustainable for her bank – India's largest lender – to continue paying other banks for  ATM-related charges.

At present, a customer is allowed five free transactions per month in other bank ATMs, but at the backend, the bank pays for every transaction a customer has made at an other bank ATM.