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Tata group plans to enter ATM business

Tata group plans to enter ATM business
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First Published: Mon, May 19 2008. 01 18 AM IST

Updated: Thu, May 22 2008. 10 34 AM IST
Mumbai: The Tata group, whose 98 companies stretching from salt to hotels, to cars and steel earn annual revenues of $55 billion (Rs2.34 trillion), now plans to enter the business of operating and managing automated teller machines, or ATMs. The firm will initially not manufacture the ATMs and related equipment but it is exploring that option as well at its communications hardware production facility in Goa.
Tata Communications Ltd, formerly VSNL Ltd, will be responsible for the ATM business, a person close to the development said. “This will be a natural extension of the group’s financial services business,” said this same person who didn’t want to be identified. “The group is in early negotiations with various banks for taking over ATM management functions. Even if it gets one-fifth of the current ATMs for management, it will mean good revenues.”
Tata Communications executives couldn’t be reached for comment over the weekend.
In addition to management fees from banks, the group plans to earn additional revenues by positioning its ATM kiosks as platforms for advertisements and other value-added services. The Tata group is also planning to own and operate currency-sorting machines and other devices such as processors and acceptors for bank notes and cheques.
US-based Diebold Inc. and NCR Corp., the two industry heavyweights, manufacture ATMs in India but do not actually manage the machines for banks in India. Germany-based ATM maker Wincor Nixdorf International AG is also present in the country.
In 2002, Tata Infotech Ltd, which was merged into the group’s software arm Tata Consultancy Services Ltd, entered into a contract manufacturing deal with Diebold for making ATMs for the Indian and South-East Asian markets.
The number of ATMs in India was 32,342 at the end of December, according to a 13 May circular by the Reserve Bank of India (RBI) which has a tight leash on the number of ATMs a bank can open even though the penetration of such machines is less in terms of population or banking business. “India currently has about 30,000 ATMs but, the country needs over 2 lakh ATMs over a period of time,” says H.N. Sinor, CEO of Indian Banks’ Association. “Since RBI has allowed third parties to run ATMs, it is good news that a business conglomerate (will be) managing ATMs for banks.”
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First Published: Mon, May 19 2008. 01 18 AM IST
More Topics: Tata Group | ATM | Banking | VSNL | Tata Communications |