Suryoday Small Finance Bank had informed its customers through its official website that it would be shutting down its Automated Teller Machines (ATMs). The bank said on its website that it will be discontinuing the ATM services; however, it did suggest that it would be providing users with another option of using their debit cards at the ATMs of other banks. The lender is looking to initiate the shut-down from October 1, 2021, onwards. The message from the bank said, “Due to operational reasons, Suryoday Bank ATMs will be discontinued with effect from 1st Oct 2021. However, you can continue to use your Suryoday Bank ATM/debit card at any other bank’s ATM for your cash withdrawal requirements.”
The small finance bank said that this move came on the back of a viability issue, seeing as not many people are using their ATMs. The bank went on to say that customers can alternatively resort to mobile banking or internet banking for their other services. This can be done around the clock as the digital facilities will be available 24×7.
“We realised that far too many customers were not using our ATMs, we could not make it a profit centre, hence we decided that we give customers free transactions on other bank ATMs rather than continuing to keep these machines,” said MD of Suryoday R Baskar Babu, as mentioned in Times of India.
He went on to say that the bank had a very low number of cash transactions as no one goes to an ATM to withdraw cash with the existence and penetration of UPI and digital wallets being what they are.
Suryoday Small Finance Bank has 26 ATMs and 555 branches. Babu said that nearly 80 per cent of the business has gone digital. This means that spending all that money on ATMs and maintaining that network is essentially a money pit for the lender in the long-term. The lender will likely offer customers five to seven free transactions per month where they will be allowed to use the ATMs of other banks to withdraw money.
When it comes to the financial performance of the bank recently, things did not appear too well according to press release that the lender had issued.
“Net interest income for the quarter ended 30 June 2021 stood at Rs 123.5 Cr, a decline of 1.7 per cent compared to the corresponding quarter of the previous year and a rise of 42.1 per cent on a lower base of previous quarter. The reduction in net interest income compared to the corresponding quarter of the previous year is primarily due to reversal of interest income of Rs 7.8 Crore on NPA accounts, impact of negative carry on account of excess liquidity maintained during the quarter and increase in the operating expenses by 32.8 per cent,” said Suryoday Small Finance Bank in a press release.
The lender went on to add, “Net total income for the quarter ended 30 June 2021 stood at Rs 146.3 Cr, a decline of 5.8 per cent compared to the corresponding quarter of the previous year and grew 59.4 per cent compared to the previous quarter.”
The bank said that the operational expenses for the quarter ended 30 June 2021 stood at Rs 92.3 crore. This indicated a rise of 32.8 per cent compared to the corresponding quarter of the previous year. It also pointed to a fall of 4.8 per cent compared to the previous quarter.
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