Using third-party automated teller machines (ATMs) may be free now, but withdrawing cash from these machines has not been easy in many parts of the country. During the first two days of free ATM use, when account-holders rushed to the nearest outlet to withdraw cash, many customers have had to deal with printouts saying “transaction declined”. Customers using their own banks’ ATMs did not, however, face similar problems. Executives at State Bank of India (SBI) and ICICI Bank, which together account for over 17,000 of the nearly 40,000 ATMs, confirmed that third-party ATM use was proving difficult. The problems were the result of overloads on the national financial switch (NFS), which enables inter-bank transactions. Transactions on a bank’s home ATM network are processed through a different switching system, while inter-bank transactions go to NFS, the country’s largest domestic network for authentication and routing payment details of various e-commerce transactions and e-government activities.
Adding to the volumes were the higher cash withdrawals at the start of the month. Typically, cash withdrawals go up ahead of a long weekend, such as the one starting tomorrow. “The traffic has increased manifold. NFS is yet to put in place requisite systems to handle this huge volume,” said an SBI executive. “For inter-bank transactions the routes are different and there may be a problem with satellite connectivity,” an ICICI Bank spokesperson said. Asked about the problem, an HDFC Bank spokesperson, however, said the bank’s terminals were not affected and there was no significant surge in volumes. Bankers said the problem had also been taken up with the Reserve Bank of India (RBI) before the shift to free ATM use from April 1. “RBI has assured us that this problem will be addressed. It will take a few days for the system to be upgraded,” a bank executive said. Although ATM use is free, for withdrawals as well as balance enquiries, banks are yet to finalise new inter-bank transaction charges. An RBI official said the regulator has not received any complaints and the problem was not due to any pricing-related issues.
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