Private sector banks seek RBI nod for ads on ATMs

Private sector bankers today urged the Reserve Bank of India (RBI) to permit banks to advertise on the automated teller machines (ATM).

The central banks permission will enable banks to recover capital expenditure incurred on installation within a period of one year. They were speaking at the at the third annual conference on ATMs in India : trends issues and new opportunities.

"The RBI should permit banks to advertise products on ATMs this will enable banks to recover their capital expenditure incurred partly," said a senior private sector banker. A number of FMCG and auto companies are willing to advertise on bank ATMs, he added.

ATMs are the major tool for cash dispensation today. The number of ATMs in India is expected to grow by over 35,000 in the next two to three years said a private sector bank executive. The growth in terms of number will come from the non metros, he added.

ICICI Bank is expected to add on around 1000 ATMs to its existing network of around 2000 ATMs by the end of the next fiscal, said banking sources. UTI Bank plans to add on another 400 ATMs to its existing network of around 1600 ATMS in the current year, said sources.

The central bank in 2002 had directed a private sector bank to stop using the bank ATM as a advertising tool. RBI was of the opinion that banks should stick to core banking activities.

"The ATM machine since 2002 has undergone major change its today become a multifaceted machine," said a senior private sector banker. Internationally banks are permitted to advertise on the ATMs.

However banks should exercise caution that the advertisements do not interfere with the transaction cycle, he added.

"For the success of ISO model (unbranded) ATMs to work its important that the regulator permits entities to advertise on the ATM," said Looney Antony managing director Euronet India.