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Private Banks join hands with IBA - Views on News from Equitymaster
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  • Jun 6, 2000

    Private Banks join hands with IBA

    The marriage of convenience between the new generation private sector banks and Indian Bank Association (IBA) will help the new private sector banks to grab a major chunk of the retail market segment at minimum cost. It will serve as a boon for the `swadhan’ customers as they will be able to pick and select the most bankable brand to `bank with’.

    Swadhan is a registered trademark for electronic banking services, owned by Indian Banks' Association, on behalf of its members and only institutions which are members of `swadhan’ SPAN (shared payment network system), are permitted to use it. It offers customers, round the clock service, easy access to cash, fast service and flexibility in withdrawals.

    The move will benefit the new generation private sector banks as they will be able to connect with the association’s closed group shared payment network system `swadhan’. Swadhan will link the ATMs of private sector banks to the network and at the same time enable their cardholders to use all Swadhan ATMs. Currently IBA has over 138 ATM centers within Mumbai. Approximately over 2,000 transactions takes place daily at the existing `swadhan’ centers worth Rs 2.2 million to Rs 2.5 million. At present around 33 bank are connected to the `swadhan’ ATM centers. This figure is expected to touch 40 by the end of the current fiscal. IBA’s objective is to evolve `swadhan’ into a nationwide network.

    To provide anytime, anywhere banking, IBA launched shared payment network system (SPNS) three years ago. SPNS is a large network of ATMs, cash dispensers spread all over Mumbai. In a span of three year, the swadhan centers have increased from 4 to 138. SPNS offer the following services:

    • Cash Transactions
    • Extended hours service
    • Across the bank payments Utility payments
    • Balance enquiry
    • Printing of statement of accounts Cheque Deposit
    • Request for Cheque book Standing Instructions and
    • Statement of account
    • Point of Sale (POS) facilities

    At present, no member bank has sponsored any POS terminal in the network. Any customer possessing the `swadhan’ ATM card can go to any ATM linked to SPNS network and transact. The system requires the PIN to be entered for every transaction to ensure security. Under swadhan, a member bank enjoys the benefit of maximum ATMs with minimum investment. Also each member bank earns revenue in the form of acquiring transaction of other banks cardholders.



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