Tata Com banking services arm bags 14K ATM orders from PSBs

The payment solutions providing arm of Tata Communications has bagged an exclusive order to install and manage nearly 14,000 ATMs for all public sector banks in Andhra Pradesh, Tamil Nadu, West Bengal, Puducherry and Andaman and Nicobar Islands, by FY14.

The contract has been won by the three-year-old wholly-owned subsidiary of the previously state-run VSNL, Tata Communications Banking InfraSolutions (TCBIL), which already manages nearly 12,900 cash vending machines for 25 banks and a a few co-operative banks across the country.

TCBIL, which specialises in payment solutions for the banking and financial services sector, is the single largest ATM operator. It has around 19% market share in terms of the number of outsourced cash vending machines and with the current order, this will go up to 21%, TCBIL President Sudip Kumar told a select media briefing here today.

"With this contract, which is a huge endorsement of our competence in the banking infrasolutions space, as we commenced operations only three years ago, we have become the largest managed ATM services provider, with almost 27,000 contracted ATMs nationwide," Kumar said. The second largest operator is the ATM manufacturer- cum-operator NCR, which enjoys 12% market share.

This contract award is part of the Government push for extending the reach of banking to unbanked areas. Last year, finance ministry had asked state-run banks to come together to launch ATMs. Accordingly, PSBs will be installing 63,000 cash machines by FY14 under a managed ATM services model.

Plans are also afoot to allow third-party operators to enter the fray under what is called white label ATMs, under which everything, including branding, will done by independent ATM operators for banks for a fee. The RBI has already issued a draft guidelines on white label ATMs.

On the rationale for a telecom network firm entering the banking services space, Tata Communications chief strategy officer Srinivasa Addepalli said, "already banks are our largest customers and there can be better synergy in extending our offering into the ATM space."