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Bachelor of Commerce – Banking & Insurance

Semester – V

2009 – 2010


In partial fulfillment of the requirements for the awarded of

the degree of Bachelor of Commerce – Banking &


Miss. Rupa .R. Nakman

Roll No: 10737


Mulund College of Commerce

S.N. Road, Mulund West. Mumbai -400080


I Rupa .R. Nakman (10737) student of B.Com Banking & Insurance

Semester – V ( 2009 – 2010 ) hereby declare that I have completed the
project on ATM.

The information submitted is true and original to the best of my


Rupa .R. Nakman



The successful completion of my project on “Automated

Teller Machine” would have been impossible without the timely help of
certain people. I am thankful to those who have helped me throughout my
project work.
I wish to express gratitude to my guide “Prof. Shailesh
welenkar” who made me confident to choose this topic and helped me to
get information and also to go ahead with the preparation of the project.
I am grateful to our principle Dr. (Mrs.) S.M. Diwanji
course Co-coordinator Prof. Mrs. Shilpa Thakur and librarian for there
I would express my indebtedness to my family members
and friends for their constant support and for infusing me with
enthusiasm to achieve the task successfully.




Objective of the project

 To make observation about the concepts & functions of

Automated Teller Machine.
 To analyses & discuss the strategic issues present in Automated
Teller Machine.
 To understand the nature & structure of Automated Teller
 To link theoretical knowledge with real life.
 Scope of the study

 The contemporary study of Automated Teller Machine in this

project based on the sample of the different sectors of the banks.
 HDFC Bank.
 IDBI Bank.
 These sample banks have been selected at random. Rather keeping
the consideration of mouth publicity factor by the customer
orientation repute has made the choice.


 The completion of the project involved acute scanning of the

library and different text books. A lot of information has also
gathered from the web.

 A visit to HDFC Bank and IDBI Bank also made to gather

information pertaining to the project.

 The information collected has been diluted and presented in very

simple and lucid manner, which will help the reader to understand
the topic.


Viewed from a purely technical perspective, an ATM is simply a safe

with an electro-mechanical input and output system which is itself
controlled by a fully electronic user interface.
Organization that manufacture ATMs –include Fujitsu, IBM NCR
and Siemens-Nixdorf – expended great effort on the user interface itself;
taking into considerable care to maximize the speed of the entire
customer interaction and keeping the language the used for the interaction
process a clear and straightforward as feasible. Most ATMs nowadays
use a cathode-ray tube (CRT) for the visual interface, although some
ATMs of an older design make use of a system where by the different
interface pages are scrolled mechanically behind a glass screen.
Incidentally, one reason why colors ATM screens have not taken off is
because no one has yet developed a reliable color screens which is easily
visible in exterior daylight.
It is important that a ATMs user interface should not only be easy
to use and clearly understandable but should be designed so as to
minimize the likelihood of the customer leaving without taking from the
machine all the things he needs to take. These are the cash, paper receipt
and above all, the card. There is no doubt that the card is the most likely
items to be forgotten by a customer, who sees the purpose of the
interactive process being to obtain cash. Consequently, ATMs usually
have some kind of sound alarm, which only ceases when the customer
has removed his card from the slot. Some machines also provide visual
message to remind the customer to retrieve the card, especially if the
functions is one where the customer is not going to lingering by the
machine until the cash has been dispensed.

In order to prevent security problem if the customer nevertheless
forgets to retrieve the card, the machine will “swallow” the card after a
short period normally about 30 seconds. The customer will then usually
need to apply centrally to get the card returned, although if ATM is
situated in the lobby or through the wall of a branch where he is known,
he can sometimes get the card back from the ATM by asking for the
branch to extract it.
The machines currently in use allow user to draw any sum of up
to a limited account, view the current position of their accounts and order
a new chequebook. To obtain money from the unit the customer need
special ATM card and is notified of personal identification number,
which is not shown on the face of the card. The card must to be inserted
into machine and the personal number typed in. the machine will validate
the code number and if correct will allow access the bank’s computer to
check the account balance and if there are sufficient funds, to withdraw


ATM can be traced back to the 1960s, when the first ATM
machine was invented by Scot John Shepherd-Barron and used by
Barclays Bank in 1967. However, while Shepherd-Barron has the major
claim to fame, there have been many other individuals who have also
invented some version of the ATM. The machine itself has evolved over
the years, with the earlier versions restricted to only one or few banking
functions. There has been much debate, however, on who invented the
first early versions of Automated Teller Machine. But the history of ATM
can be visibly traced back to the year of 1967.
In 1939, a rudimentary cash dispenser was invented by Luther George
Simijian and established by the City Bank of New York. However, the
machine did not work much and had to be removed within six months of
putting up the machine. The early versions of the ATM were restricted to
cash withdrawal only. In the 1967 model, patented by Shepherd-Barron,
the plastic cards did not exist and instead a voucher with a strip of
radioactive substance was used for withdrawing cash. Consequently, the
vouchers were matched with a particular personal pin code used by the
bank to identify the customer. The ATM was inaugurated by renowned
British actor, Reg Varney. The personal identification number was
initially a six numbered password, and was later changed to a four
numbered password. However, this automated teller machine was very
different from the modern day teller machines, which is based on an
electronic system between the different branches of the bank. Thus, the
history of ATM has seen many changes over the span of 25 years since

Another co-patent to the invention of the ATM was Don Wetzel,
the Vice President of Product Planning at Docutel. While the
conceptualization began in 1968, the patent was issued only in 1973. This
cash dispenser was first used by the New York based bank, namely, the
Chemical Bank. As was the case with the ATMs of during those years,
they were hardly a multi-functional unit. Moreover, they were not based
on any electronic system. Hence, the debit cards, distinct from credit
cards, were given to only selected clients with good track records. The
first ATM cards, with magnetic strips were developed by three
individuals, namely Don Wetzel, Tom Barnes and George Chastain.
While there were many developments in the history of ATM, the service
itself took a stronghold only in the 1970s. Today, the ATM service has
become indispensable to our modern day lives.


Many people have claimed to be the inventor of the ATM. Some believe
that Luther George Simjian did it. Some believe that it was Don Wetzel.
Still others say the inventor is John Shepherd-Barron. John D. White has
contacted and gave very convincing evidence that he
is the inventor of ATM and not Don Wetzel. James Goodfellow of
Scotland also contacted and gave us convincing
evidence of inventing ATM. Since the patent on an ATM as we know it
was never applied until years after Simjian, confusion on inventor till
exists. One reason for confusion is that John Shepherd-Barron lived in the
United kingdom, James Goodfellow in Scotland, while others lived in
USA. We present all the evidence, as we know it on this page.

The ATM Inventors and the facts:

Luther George Simjian:

In the late 1930's, Luther George Simjian started building an earlier and
not-so-successful version of an ATM, but he did register related patents.
He initially came up with the idea of creating a hole-in-the-wall machine
that would allow customers to make financial transactions; the idea was
met with a great deal of doubt. Starting in 1939, Simjian registered 20
patents related to the device and persuaded what is now Citicorp to give it
a trial. After six months, the bank reported that there was little demand.
Today, as you know, there is a huge demand!

John Shepherd-Barron:
John Shepherd-Barron had an idea in the 1960's for a 24/7 cash dispenser.
At the time, he was managing director of De La Rue Instruments. De La
Rue today manufactures cash dispensers. In fact, there is a De La Rue
cash dispenser in 1 out of every 5 ATM machines built. If you want to
believe that Shepherd-Barron invented the ATM, then the world's first
ATM was installed outside a north London branch of Barclays Bank in
1967. Later In 1967, Shepherd-Barron presented his idea to a conference
of 2,000 US bankers in Miami, after the first ATMs had been installed in
England. He spoke to the conference about the new self-service banking
device he developed. On December 31, 2004, John Shepherd-Barron, was
named an Officer of the Order of the British Empire, or OBE, by the
Queen of England for services to banking. "It was a bit late, but better
late than never," said Shepherd-Barron. Press releases stated that
Shepherd-Barron was the "Inventor of the ATM." But, was he?

James Goodfellow :
As a Development engineer with Smiths Industries Ltd, James
Goodfellow was given the project of developing an automatic cash
dispenser in 1965. Chubb Lock & Safe Co. were to provide the secure
physical housing and the mechanical dispenser mechanism. Eventually
Mr. Goodfellow designed a system which accepted a machine readable
encrypted card, to which he added a numerical keypad. UK Patent
No.1,197,183 with a priority date of May 2 1966, covers this invention,
and it is also covered by US Patent No.3,905,461 and Patents granted by
many other countries. These Patents list James Goodfellow as inventor,
along with the late A.I.O.Davies, the company General Manager. This US
Patent still describes the basic ATM function almost 40 years later. These
Machines were marketed by Chubb LTD and installed nationwide in the

UK during the late 60s and early 70s. You can read ATM inventor James
Goodfellow's story here on Thanks goes out to Mr.
Goodfellow for giving us his permission. (Update: In 2006, James
Goodfellow was selected by the Queen to be awarded an OBE for
services to Banking as patentee of the Personal Identification Number
(PIN), and his service to banking.

Don Wetzel:
In 1968, according to a NMAH interview, Don Wetzel, says he was the
Vice President of Product Planning at Docutel, the company that
developed automated baggage-handling equipment. He applied for a
patent on an ATM machine. He said there were two other inventors listed
on the patent. They were Tom Barnes, a mechanical engineer and George
Chastain, an electrical engineer. It took five million dollars to develop
their ATM according to Mr. Wetzel. If you want to believe that Wetzel
and company invented the ATM, then you might want to read the next

John D. White:
John D. White told that his work started in 1968. He
told us that he installed the first ATM at Rockville Center, LI for the then
Chemical Bank in August 1973. His design was patented on May 9, 1973
for the Docutel Corporation and was filed on July 29, 1970. The machine
was called a "Credit Card Automatic Currency Dispenser". Mr. White
provided copies of his patent to for our review. Indeed
it states the inventor of the machine was John D. White and Kenneth
Goldstein, and the assignee on the patent was the Docutel Corporation. It
does seem to us that this is very convincing evidence that it was White
and not Wetzel who received the patent. There is also a statement in the

patent that supports the idea of the modern ATM. "Both the original code
and the updated code are scrambled in accordance with a changing key",
which is basically what happens today. ATMs are programmed with
security keys and the code changes and are scrambled to prevent
fraudulent access to credit card and ATM numbers between the machine,
the bank, and the network processor. We would like to thank Mr. White
for contacting us. The patent drawings he gave us look very much like the
free standing ATM that is sold on today.

Jairus Larson:
Jairus Larson told that although he did not invent the
ATM, as far as he is aware , he did develop the very first 'on-line' ATM
(Diebold's "550"). The first ATM's were all 'off-line' versions (sometimes
referred to as 'stand-alone') meaning they did not have any means to
communicate with the bank. Today's ATMs are 'on-line' meaning they
communicate with the bank's computer system. Mr. Larson was kind
enough to give us his account of how this happened in the early 1970's.
You can read about Mr. Larson's ATM development here.


If you have a bank account there is a good chance that you have an
ATM card, which stands for Automated Teller Machine. This card gives
you the ability to go to an ATM and perform transactions. An ATM is a
machine or computerized terminal that gives bank customers the ability
to access their funds without the need of a teller or bank employee. Every
customer has a four-digit pin code, as a matter of security that must be
keyed in before transactions can be performed. Customers have access to
their funds 24 hours per day, seven days per week.


More people use plastic to pay for items than cash. There are many
different types of cards used to make purchases or withdraw money and
many people don't think about the differences. There are significant
differences between ATM, debit and credit cards. There are several
different types of cards that fall under the category of an ATM card.

Basic ATM Card :

Your basic ATM card only has a few uses. It can be used at any
ATM machine for the bank that issued it and sometimes at other banks
for a fee. You can use your ATM card to withdraw and deposit money,
check your account balance and transfer funds. Some ATM cards also
have a few more uses like paying loans and getting cash advances,
however ATM cards cannot be used to make purchases

Debit ATM Card :

An ATM debit card has all the features of a regular ATM card with
the added features of a debit card. This card can be used to make
purchases at any store or online. Typically they will have a credit card
logo on them, although they do not work the same way as credit cards.
Every time and ATM debit card is used; money is taken out of the
checking account it is linked to.

ATM Credit Cards :
A new type of debit card is available at some banks. This type of
card has all the features of the ATM debit card plus the features of a
credit card. This card is not only attached to a checking account, but also
to a line of credit. This means that if the person overdrafts on their
account they will not incur any fees and will instead have money taken
out of their credit line to be paid back with interest when funds are made


There are mainly two types of ATM’s which differ according to the way
they operate. They can be called as
• Leased-line ATM
Dial-up ATM machines
Any ATM machine needs a data terminal with two inputs and four
output devices. Of course, for this to happen there should also be the
availability of a host processor. The host processor is necessary so that
the ATM can connect and also communicate with the person requesting
the cash. The Internet Service Provider (ISP) also plays an important role
in this action. They act as the gateway to the intermediate networks and
also the bank computer.
A leased-line ATM machine has a 4-wire, point to point dedicated
telephone line which helps in connecting it with the host processor. These
types of machines are preferred in places where the user volume is high.
They are considered high end and the operating costs of this type of a
machine is very high.
The dial-up ATM machines only has a normal phone line with a
modem and a toll free number. As these are normal connections their
initial installation cost is very less and their operating costs only become
a fraction of that of a leased-line ATM.
The host is mainly owned by the bank. It can also be owned by an
ISP. If the host is owned by the bank only machines that work for that
particular bank will be supported.


As told earlier, there are mainly two input devices and four output
devices for an ATM. The input devices are:

Card Reader – This is a part of the identification of your particular

account number. For this the magnetic stripe on the back of the ATM
card is either swiped or pressed on the card reader so that it captures your
account information. To understand the account information of the user,
the data from the card is passed on to the host processor. The host
processor thus uses this data to get the information from the card holder’s

Keypad – After the card is recognized, the machine asks further details
like the type of withdrawal you prefer, your balance enquiry, and your
personal identification number (PIN) and so on. Since each card has a
unique PIN number, there is very little chance for someone else to
withdraw money from your account. There are also separate laws to
protect the PIN code while sending it to the host processor. So, the PIN
number is mostly sent in encrypted form.

If your pin number is correct the ATM makes the necessary transactions
for the required amount.

For this transaction, there are mainly four outputs. They are:

Speaker – When a particular key is pressed, the speaker provides the

feedback as audio.

Display Screen – The questions asked by the ATM machine regarding

the transaction and the input from the user is all displayed on the display
screen. Each step of withdrawal is shown by the display screen. A CRT
screen or even an LCD screen is commonly used as an LCD screen.

Receipt printer – All the details regarding your withdrawal like the date
and time and the amount withdrawn and also the balance amount in the
bank is also shown in the receipt. Thus a paper receipt of the current
transaction is obtained by the user.
Cash dispenser – This is the central system of the ATM machine. This is
from where the required money is obtained. From this portion the person
can collect the money.
Functions of the Cash Dispenser:
As the whole mechanism is regarding the withdrawal of cash, the
cash dispenser should be highly efficient. These are the main functions
that are to be carried out by the cash dispenser.
It is the duty of the cash dispenser to count each bill and give the
required amount. If there are cases where the bills are stuck together they
should be rejected and instead new notes should be taken. If the money is
worn, or even folded, they will be moved to another section called the
reject bin. All these actions are carried out by high-precision sensors.
There may be cases where the sensors may go wrong. To know
this, the person responsible for the machine checks the number of rejected
notes at a certain interval. If the numbers of notes are a lot than expected,
then it would indicate that either the quality of the bills is not good or
there is a problem with the cash dispenser.
A complete record of each transaction made by a particular ATM
machine is recorded each day and is kept as a journal. This journal is later
collected and then printed out at times. This information regarding the
transaction is kept by the authorities for a period of 2 years. As there may
be cases regarding a particular transaction going wrong, the account
owner or also the bank officers have a right to see the transaction. With
this printout the account holder can contact the host processor.

ATM Networking:
When a transaction is made, the details are inputted by the card
holder. This information is passed on to the host processor by the ATM
machine. The host processor checks these details with the authorized
bank. If the details are correct, the requested cash by the card holder is
taken with the help of an electronic fund from the customer’s bank
account to the host processor’s account. After this function is carried out,
the processor sends an approval code to the ATM machine so that the
cash can be transferred.


ATMs, standing for "Automatic Teller Machines", are an easy,

convenient way to access your account from almost anywhere. If you're
new to them, don't worry. It's easy. The instructions are right there, on the

Steps involved in Depositing Money:

1. Be alert.
As you approach the ATM, look around for other people. If it is night
time, pick an ATM in a well-lit location. If using a drive-up ATM,
pull up close to it so no one can see you enter your PIN (Personal
Identification Number). If you are uncomfortable with the area or the
people around the machine, find a different machine or use the
machine some other time

2. Fill out a deposit slip, if needed.

Take an envelope and prepare any deposits
you will make ahead of time.

Fill out a deposit slip, if your bank requires one, and include it in the
envelope. Write the amounts of money you are depositing in the space
Write the total of all your cash on the first line.

3. Endorse your check.

To deposit a check, sign the back of the check ( called "endorsing" the
check) with your name as it is written on the front. Depending on the
rules of your bank, you may also write "for deposit only" and include
your account number, as shown.
Write the amount of each check on a line of the deposit slip. Beside it,
write the "fraction". This number appears on the face of the check,
often in the upper right corner near the check number. It tells your
bank where the check came from. Add up the amounts you are
depositing and write the number down where you can see it after you
seal the envelope. Then, seal the envelope.
4. Insert your ATM Card into the machine.
5. Select a language.
Note that this option often only comes up where your card is
registered as being from another country, unless you live in a country
or region with languages other than English are in major use.
6. Enter your PIN (Personal Identification Number),
Then press Enter.
7. Select a transaction.
8. Deposit money.
If you want to deposit (put in) money:

Enter the amount you will deposit. Confirm the amount.
Insert the envelope into the deposit slot when the machine opens it.
Note that some ATMs will not allow you to deposit money. In this
case, you need to find one at a branch.

Steps involved in Withdrawing Money:

1. Insert your ATM Card into the machine
2. Select a language.
3. Enter your PIN (Personal Identification Number), then press
4. Withdraw money.
If you want to withdraw (take out) money, select or enter the amount
to withdraw.
Most machines dispense money in fixed amounts. You may be given a
choice between common amounts or you may be asked to enter a
number that is a multiple of 20 (20, 40, 60, 80, etc.).
Take the cash when the door opens. Put it directly into your wallet.
5. Choose whether to do an additional transaction. Select Yes or No.
6. Choose whether you want a receipt, select Yes or No. Take the
receipt if you requested it.
7. Wait while the system processes your transaction(s).
When the machine beeps at you, take your card, cash, and receipt (if
applicable). Always make sure that you have both your cash and your
8. Use the receipt to record the transaction in your check register or


Cash Withdrawal and Balance Enquiry :

In spite of a number of innovative services being made available at

many ATMs, cash withdrawal stills remains the most accessed service at
ATMs. However, the migration of routine bank transactions like cash
withdrawals and balance enquiries from teller counters to ATMs
significantly raises the potential for savings in employee costs and greater
employee focus on value-added revenue-enhancing activities such as
selling other financial products and advisory services to customers.

Cash /Cheque Deposit :

Again, due to the strong cash culture in India, cash deposits are
most likely higher than in other markets, especially cash deposits made
by commercial customers such as retail shopkeepers and those whose
work involves substantial traveling. A high cash withdrawal rate results
in higher ATM servicing costs due to frequent cash replenishment
requirements. Recent developments in ATM technology have made it
possible to recycle cash in ATMs.
Currency notes received as cash deposits are counted; soiled notes
separated and deposited cash dispensed to fulfill withdrawal transactions.
However, regulatory concerns relating to identification of counterfeit
notes and its depositors need to be addressed first.

ATM with Cheque deposit facility is not picking up in India, like
other countries. One of the reasons is the delay in collection of the cheque
deposited in ATMs. Cheque deposited in ATMs is to be collected and
deposited in the designated branch for collection. Another reason is the
introduction of cheque deposit Kiosks by various Banks especially
Private sector ones. These are kept at each some important
locations/branches where customers can deposit there cheques which are
collected at intervals which may be difficult in ATMs.

Bill Payments :

Most utilities have inadequate infrastructure for receiving bill

payments resulting in long queues at collection centres. Hence, bill
payment at ATMs has achieved noticeable acceptance by bank
customers. Most banks provide this service through bi-lateral
arrangements with bill-payment service providers. ATM users register
their water, electricity and telephone utility accounts with banks, check
their dues at ATMs, approve bill payments that are debited to their bank
accounts and receive printed receipts for the transactions. This service has
the effect of improving customer satisfaction for both the bank as well as
the bill-payment service providers. Some Banks’ ATMs even accept
charitable contributions to Temples.

Sale of Paper sled Products:

ATMs are ideally suited to sell paper-based products and services

such as tickets, wireless phone recharge cards, financial products, etc.
The screen interface allows browsing and customization, access to bank
accounts facilitate payments and printing capabilities produce the actual

product/service. A number of banks including ICICI Bank, SBI and PNB
have ATMs at Mumbai’s local railway stations to dispense season tickets
to commuters. Own-bank customers pay no extra charge while other bank
customers pay a fee of Rs. 50 for this extremely useful service of anytime
ticket purchase. Railway season tickets represent a high-volume mass-
appeal product. As technical standards get established and
product/service sellers become aware of the ATM sales channel, niche-
appeal high-margin products like entertainment tickets will join the fray.


Information Kiosks has been introduced by many Banks and also

by PSUs like Railways, Tourist centers etc. While the revenue-producing
capacity of non-emergency type of information at ATMs as a stand-alone
product is doubtful, many customers may be willing to pay a nominal fee
for information having “impulsive” demand such as cricket scores while
they wait for their transactions to be processed. To be sure, providing
information, whether priced or free, will appeal to
some customers and increase customer satisfaction.
Union Bank has used technology to establish Village Knowledge
Centers (VKCs), which have proved to be a success in the 198 centers,
where they have been set up. VKCs empower the local rural population
by giving them information on various vital inputs such as weather,
fertilizers, prices of crops, etc. The bank is also operating financial
education centers offering counseling at 51 of these VKCs.

Third Party Advertising:

In India, ATM advertising for third-party products is currently not

allowed by Regulatory authorities. However, the wait time at ATMs can
be effectively used by banks to promote their own brands, product and
services. Furthermore, banks can tailor advertising messages based on
customer information easily available in their accounting and CRM
databases. Customer wait-time at ATMs while transactions get processed,
typically between 10 to 25 seconds, has been profitably used by many
banks for their own advertising.

Money Transfers:

Indians, who have migrated abroad or to cities, regularly use

money orders and wire transfers to send money to their families back
home. ATM growth, especially in rural India, will capture substantial
business from the expensive wire transfer agents’ network and the
customer-service lacking postal network. In line with international trends,
ATMs can be made capable to dispense printed money orders or initiate
wire transfers against a charge on customers’ bank accounts. After
addressing regulatory hurdles, these services can even be made available
to non-account holders through cash payments using the currency
acceptors built into ATMs. ATMs can also facilitate the encashment of
wire transfer amounts by allowing even non-account holders to withdraw
cash based on Pin’s or previously mailed special-purpose ATM cards.

Recharge Mobiles via ATMs:

ATMs are also used to recharge mobile phones. Initiated in 2004

by ICICI Bank, now most ATM/Debit Cardholders are able to recharge
their pre-paid subscriptions of most mobile service providers from
anywhere in the country using their bank‘s ATMs or by sending a SMS.
The amount for recharging the mobile phone would be debited
from the subscriber‘s Bank account and the subscription would be
directly recharged accordingly. The mobile top-up facility provides
convenience on ATMs and through mobile phones using SMS.


Most ATM frauds happen due to the negligence of customers in

using, and more importantly, negligence of banks in educating their
customers about the matters that should be taken care of while at an
The number of ATM frauds in India is more in regard to negligence
of the Personal Identification Number (PIN), than by sophisticated crimes
like skimming. Banks need to develop a fraud policy – the policy should
be written and distributed to all employees, borrowers and depositors.
The most important aspect for reducing ATM related fraud is to
educate the customer. Here is a compiled list of guidelines to help your
customer from being an ATM fraud victim:

Look for suspicious attachments:

Criminals often capture information through ATM skimming –
using devices that steal magnetic strip information. At a glance, the
skimmer looks just like a regular ATM slot, but it‘s an attachment that
captures ATM card numbers. To spot one, the attachment slightly
protrudes from the machine and may not be parallel with the inherent
grooves. Sometimes, the equipment will even cut off the printed labels on
the ATM. The skimmer will not obtain PIN numbers, however. To get
that, fraudsters place hidden cameras facing the ATM screen. There‘s
also the helpful bystander (the criminal) who may be standing by to
kindly inform you the machine has had problems and offer to help. If you
do not feel safe at any time, press the ATM cancel button, remove your
card and leave the area immediately.

Minimize your time at the ATM:
The more time you spend at the ATM, the more vulnerable you
are. If you need to update your records after a transaction, one is advised
do it at home or office, but not while at the ATM. Even when depositing
a cheque at the ATM, on should not make/sign the cheque at the ATM.
After the transaction, if you think you are being followed, go to an area
with a lot of people and call the police.

Make smart deposits:

Some ATMs allow you to directly deposit checks and cash into
your accounts without stuffing envelopes. As for the envelope-based
deposits, make sure they go through – if it gets jammed and it doesn‘t
fully go into the machine, the next person can walk up and take it out.
After having made the ATM deposit, compare your records with the
account statements or online banking records.

Avoid using ATMs at night:

While robberies are less prevalent than fraud at ATMs, there‘s still
risk, especially at night. And if you have to use an ATM late at night, use
one at a bank itself. Financial institutions have to follow certain
guidelines and regulations as far as lighting is concerned. They also have
cameras on all the ATMs.

Be aware of your surroundings:

Before you slide your card into the machine, look around if the
area appears safe or if there is anybody who can see the PIN pad. Having
the card ready before entering is ATM premises is better than searching
for it though the purse at the machine. While you are fumbling with a
wallet or purse, you are easy prey for a thief. A good rule of thumb is to

always shield your card, no matter how comfortable you are with the
place. If your card is stuck inside an ATM, be suspicious of anyone
offering help. Immediately report the incident to the bank

Keep your receipts and card before leaving the place:

Before you leave the machine, make sure you have your card.
Also, do not leave your receipt behind at the ATM. Keep copies of your
receipts and compare them with your monthly statement. As much as 83
percent of all ATM and debit fraud results from stolen cards and
discarded receipts bearing card/account numbers.

Memorize your PIN:

Many cardholders walk up to an ATM and pull out a piece of paper
containing four numbers. If you are not sure, make it a point that you
don’t keep the PIN and ATM card together in your wallet – If someone
comes up and hits you over the head, they‘re going to have all your
information right there. But ideally, one should never write down the PIN
number – it should be memorized.

Never disclose your PIN to anyone:

Even bank officials do not require an ATM PIN – neither to
process an issue involving ATMs, nor to remove a card stuck in the
machine. Always change the PIN as soon as you receive it. Preferably,
change it every quarter. This habit will also help remind you of changing
the PIN if you find a suspicious activity.

Never provide information via e-mail:
About 3.5 percent of ATM and point-of-sale debit fraud originates
from ‘phasing’ e-mails. Phi hers attempt to obtain information about your
bank account by asking for your PIN, account number and personal
information. Much like ATM skimming equipment, these e-mails appear
legitimate. If you click on a link, you will be sent to a Web site that looks
exactly like the one the phi hers are imitating. Reputable companies do
not ask for information through e-mail. If you receive one of these e-
mails, inform the organization. And if you believe your accounts have
been compromised, inform your financial institution and cancel the


ATM Advantages :
• Ability to draw cash outside normal banking hours.
• Cheaper where bank charges are incurred and often quicker than using
normal cashier services.
• Does not just operate as a medium for obtaining cash.
• Amount up to a set limit per day is available.
• All customers can apply for the joint accounts two separate cards can
be issued.
• Although ATMs are primarily located on bank premises, some are
available elsewhere.
• Where an incorrect PIN is used several times in succession (say where
a thief has stolen the card),the ATM will retain the card.
• ATM service is available for 24 hours a day,7 days in a week.
• It helps to check the balance in an account.
• It is easy, saves time of customers.

ATM disadvantages :
• If person who does not have sufficient
money in its account, then
in this case the ATM may not recognize his card.
• May be ATM’s may not be situated near
by when it is urgently
• If some one watches or hacks ATM
machine then details of
customers can be misused.
• Banks have maintained a limit of Rs
10,000/- per transaction. This
information is displayed on the ATM. The maximum limit is
Rs.25000/- per day. No one can withdraw money beyond this limit.


Although both these cards serve the same purposes, most of the
banks favour in the issue of credit cards. When you purchase something
with a debit card, the money is automatically deducted from your savings
account. This is different from the way a credit card works. For a credit
card, you get a monthly bill for the amount you have spent. You can take
money directly with the help of an ATM card. But, with a debit card, you
can only purchase things. You can use ATM cards for some direct
purchase as well, but it is limited.
Debit cards can be used in different fields like grocery stores,
hotels, booking tickets, pharmacies and so on.
As credit cards are easier to use, some hotels and rental services often do
not accept debit cards. Credit cards also bring in lesser risk and are also
There is a difference when using a credit card and a debit card
when checking into a hotel. In the case of a credit card, the original
amount will be billed in your account. When a debit card is used, a
certain amount of money which includes the cost/rent of the room and an
additional amount which may be a percentage of the total fee will be kept
as an “on hold” bill in your bank account. The additional money is kept
as a precaution as a damage money. When you check out of the hotel,
you will be billed the original amount of your stay. But the difference
between the “on hold” money and your actual money will be released
back to your account.

The next difference comes in the way you bill the amount. If it is a
debit card, you will have to enter your unique pin number. If it is a credit
card, you will have to sign a slip. Some banks even put a fee for your
debit card.
There is also a difference in appearance between an ATM card and
a debit card. A debit card has the users name, the company’s logo, the
bank’s logo and also written “Check card” in front of it. An ATM card,
on the other hand has the user name, account number and also the bank
logo. Both the cards have a common strip on the back of the card, so that
the user can sign on it.


Automated Teller Machines (ATMs) have gained prominence as a

delivery channel for banking transactions in India. Banks have been
deploying ATMs to increase their reach. As at the end of December 2007,
the number of ATMs deployed in India was 32,342.
From first day of April 2009, entire ATM network is now available
to customers from any bank for transactions for no fee at all, irrespective
of the banks in which they have their accounts, Now Customers will not
be levied any fee on cash withdrawals using ATM and debit cards issued
by other banks. This will in turn increase usage of ATMs in India
More people are now moving towards using the automated teller
machines (ATM) for their banking needs. According to a survey by Bank
net India, 95% people now prefer this modern channel to traditional mode
of banking. Almost 60% people use an ATM at least once a week
Increased ATM usage is also helped by the fact that customers
have now the flexibility of using ATMs of other banks, as most of the
banks are part of major interbank networks like National Financial
Switch (NFS), Mitr, BANCS, Cash tree and Cash net. The interbank
networks have brought together ATMs of several banks so that
consumers would gain access to any of the participating banks’ ATMs.
Banks find it cheaper to pay membership fees to these networks as
against setting up additional units in expensive-to-deploy areas.
ATMs are now seen to be more than mere cash dispensing
machines. Customers use ATMs to recharge their mobile phone pre-paid
connections, pay their utility bills, even mutual fund transactions –

making them at par with flexibility given in internet banking – only more
secure. Of the value-added services provided at ATMs, bill-payment is
the most used service, followed by prepaid mobile talk-time recharges.
However, still about one third of the respondents do not use any value
added services at ATMs.
The ATM market in India is not yet saturated. Though the
concentration of ATMs is greater in metros, the demand is increasing for
other cities and even rural areas. ATM's per million people approximately
is 33 units is very low. Experts forecast that the growth rate is expected to
grow 18 percent up by 2013. Banks going into a self service model can
have huge saving potential for banks and may also increase the
convenience for the customers.
Many ATM vendors have devised specialized machines,
embedded with biometric devices for authentication. Catering to the rural
population, these machines have enabled them to interact with the
machine in their local language and on a graphical user interface. The
rural customer has seemed to accept this new medium. This has the
potential to further widen the scope of ATM usage in the interior parts of
the country. There is also interest towards white-label ATMs. Many
companies are interested in this model, where the ownership of the ATM
will not be with the banks but with third parties who deploy them and
make money on fees charged on every transaction. The concept is
prevalent in the American continent Wide acceptance of ATMs by
consumers, introduction of biometric ATMs, and increasing scope of
value-added ATM services will maintain growth in the industry.


With over 4,393 ATMs present across India, you can withdraw
cash and do much more at HDFC Bank ATM. The sophisticated,
computerised network gives you the flexibility of accessing your account.

Features & Benefits:

• 24-hour access to Cash.
• Personalised Cash Withdrawals.
• View Account Balances & Mini-
• Change ATM PIN.
• Order a Cheque Book / Account
• HDFC Bank Credit Card Payment.
• Deposit Cash or Cheques.
• Transfer Funds between accounts -
Transfer money between your
accounts. Both accounts must be linked to your ATM / Debit Card.
• Maximum of 16 A/cs (Savings /
Current) can be linked to a card.
• Refill your Prepaid Mobile.
• Pay your Utility Bills.
• Cheque Status Enquiry.
• NetBanking Password Request.

Difference between ATM and Credit card:
An ATM Card is different from a Credit Card. Using your ATM
Card, you can access your account and carry out most of your banking
transactions, round the clock. But you cannot shop with your ATM Card.
Also, unlike a Credit Card, your ATM Card prevents you from
over-extending yourself by permitting you to withdraw cash only as long
as there is money in your account. Finally, if you withdraw cash using a
Credit Card, you will be charged a service fee, whereas using an ATM
Card does not attract any charges.
Necessary to maintain minimum balance:
It is necessary to maintain any minimum balance in the account
for using the card. One can only withdraw to the extent of the balance in
the account.
Fund transfer option at the ATM :
In order to use the Funds Transfer option, you must have more than
one Savings (single, either or survivor) or sole proprietorship Current
Account with the bank. You need to make a request at any of our
branches or on PhoneBanking to link your accounts to your Card. Once
the accounts are linked to your ATM Card, you can use the Funds
Transfer option.
Charge on ATM transaction:

HDFC Bank does not charge on its customers who maintain the
required AQB or on other Bank customers for using their ATM. For
customers of HDFC Bank who have not maintained the required AQB in
the previous quarter, all inter-city cash transactions will be levied Rs 1.50
per Rs 1000, minimum Rs 25.

Cards that can be used at HDFC ATM:

1. American Express : Charge/Credit Cards.
2. Cirrus:
MasterCard Credit Cards - Domestic/International (of domestic,
currently only Citibank, Standard Chartered and ANZ MasterCard
Credit Cards can be used at our ATMs).
Cirrus ATM Cards - Domestic/International
Maestro Debit Cards - Domestic/International (of domestic
Cirrus/Maestro Cards, currently only Citibank Maestro/Cirrus Cards
can be used at our ATMs) .
3. Plus:
VISA Credit Cards - Domestic/International (of domestic, currently
only Citibank, Standard Chartered, HSBC and ANZ can be used at our
Plus ATM Cards - Domestic/International
VISA Electron Debit Cards - Domestic/International
Note: All cards which can be used at HDFC ATM need to have a
Personal Identification Number (confidential code) for ATM access.
This is issued by the Bank issuing the Card. Limits and parameters are
set by the Card issuing Banks regarding amount of cash withdrawal,
withdrawal limit, number of PIN log-in attempts, transaction set
allowed and declines.

HDFC Bank ATM Card can only be used at our ATMs.
Cash advance / Cash withdrawal limit :
HDFC Bank customers can withdraw up to Rs.10,000/- per day.
For non-HDFC Bank customers, the limit is as decided by the bank
issuing the Card.

Liability incase an ATM / Debit card is lost or stolen :

For doing an ATM transaction, two things are required; an ATM /
Debit card and PIN, which is known only to the customer. In case your
ATM /Debit card is lost/stolen, any transactions taking place using the
card on an ATM is the result of you compromising your PIN which
should have been known only to you and no other person. Thus in such a
scenario you are liable for the loss incurred due to the transaction
happening on the ATM. However, there is 'Zero Liability' applicable for
Debit cards only on fraudulent Point of Sale Transactions and not ATM
Card lost or stolen:
In case card is lost / stolen, as first step you need to block your card
in order to avoid any fraudulent transaction happening from your account.
For blocking card you need to either :
• Call up your local HDFC Bank Phone
Banking No.
• Log onto HDFC Bank NetBanking and
block the card using the
option of 'Hotlisting' under 'Debit Cards'.

• Visit your nearest HDFC Bank Branch.
If ATM card get stuck inside the HDFC Bank ATM :
• Log a complain with the local HDFC
Bank PhoneBanking Number
• Visit your nearest HDFC Bank Branch.
You can request for card to
be delivered either at the mailing address which you have
given to the Bank or at the nearest branch where you will have to
collect the same in person.

IF ATM card get stuck inside any other bank ATM :

In case HDFC Bank card gets captured inside any other Bank's
ATM machine you are requested to block your card immediately by
either Calling up the local HDFC Bank .
In case ATM pin is forgotten by card holder:
One can place the request for regeneration of ATM PIN either
Calling up the local HDFC Bank PhoneBanking Number
Charge incurred for regenerating ATM PIN :
One will be charged Rs.25/-(exclusive of taxes) towards
regeneration of the ATM PIN.

Meaning of ATM :
Automated Teller Machine is a computerized machine that
provides the customers of banks the facility of accessing their accounts
for dispensing cash and to carry out other financial transactions without
the need of actually visiting a bank branch.
Types of card used :
The ATM cards/debit cards, credit cards and prepaid cards (that
permit cash withdrawal) can be used at ATMs for various transactions.
Transaction at ATM :
For transacting at an ATM, the customer insert (swipe) their card
in the ATM and enter their Personal Identification Number (PIN).
Services and Facilities :
In addition to cash dispensing ATMs may have many
services/facilities such as:
• Account information
• Cash Deposit

• Regular bills payment
• Purchase of Re-load Vouchers for
• Mini/Short Statement
• However, if the card is used at an ATM
of any other bank, the
customer would be able to do only cash withdrawal and balance
enquiry transactions.
Uses of ATM card at any bank of country :
The cards issued by banks in India should be enabled for use at
any bank ATM within India.

Personal Identification Number(PIN) :

PIN is the numeric password for use at the ATM. The PIN is
separately mailed/handed over to the customer by the bank while issuing
the card. This PIN has to be reset to a new PIN by the customer. Most
banks force the customers to change the PIN on the first use.
In case one has forget his Pin or card is sucked by the ATM :
The customer may contact the card issuing bank branch and apply
for issuance of a new card. This procedure is applicable even if the card is
sucked in at another bank's ATM.
Card lost or stolen :
The customer may contact the card issuing bank immediately on
noticing the loss so as to enable the bank to block such cards.
Minimum and Maximum cash withdrawal limit per day :
Banks set limit for cash withdrawal by customers.

The cash withdrawal limit for use at the ATM of the issuing bank is set
by the bank during the issuance of the card.
For cash withdrawals at other bank ATMs, banks have decided to
maintain a limit of Rs 10,000/- per transaction. This information is
displayed on the ATM. The maximum limit is Rs.25000/- per day.
Service fees charged for use of other bank ATM :
No charges are payable for using other bank's ATM for cash
withdrawal and balance enquiry, as RBI has made it free under its "Free
ATM access policy" since April 01, 2009. But banks can restrict the
number of such free transactions to a maximum of five per month. For
transactions beyond this minimum number of transaction, banks charge
maximum of Rs 20/- per transaction.

In case, during the cash withdrawal process cash is not disbursed but
the account gets debited for the amount :
The customer may lodge a complaint with the card-issuing bank.
This process is applicable even if the transaction was carried out at
another bank's ATM.
Days required by the bank to re-credit the account for such wrong
debits :
As per the RBI instructions, banks may re-credit such wrongly
debited amounts within a maximum period of 12 working days from the
date of receipt of the customer's complaint.
Customers eligible for compensation for delays beyond 12 working
days :
Effective from July 17, 2009, banks shall have to pay customers Rs
100/- per day for delays beyond 12 working days. This shall have to be

credited to the account of the customer without any claim being made by
the customer.
In case of compensation is not credited as mandated :
For all such issues, customer may lodge a complaint with the bank
and if the bank does not respond, the customer may approach the local
Banking Ombudsman


In this era of growing competition among the banks, ATM’s have

played a vital role in helping the bank to sustain in the market. The
ATM’s have gained worldwide popularity within a few years. ATM
machines are easy to operate and hence, attract more and more customers.
There are quite of innovations, which are being taken place in the ATM
machine. The locations of ATM’s are the key location of any particular
area. ATM’s is a form of easy banking. The aim of banks of setting of
ATM’s is to cater to the needs of the customers. The flexibility of the
ATM’s has increased so much that now-a-days, have been reached the
doorsteps of the customers. The customers using the ATM machine are
satisfied with the service and have very less complaints about the

Thus the ATM’s i.e. any time money machine has fulfilled the
customer’s needs to its greatest extent. In the near future the banks have
also promised to come up with new innovations in the ATM’s.


New concepts of banking
By – S.S. Kaptan
Virtual banking revolution
By – James Essinger
Banking law and practices
By – P.N. Varshney