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A STUDY OF ATM CARDS IN BANKSBY: sai krishna | Category: Business and Finance | Post Date: 2009-11-21
(With Special reference to state Bank Of Hyderabad) With financial liberalisation, growth of new institutions and new attractive instruments in the financial markets, banking industry over the world is fast undergoing radical changes in its framework and operational modalities. Banks are diversifying for improving profitability, increasing absolute profits, expanding the volume of banking business and making the bank financially a viable unit. So, the expanding and diversifying banking system and complexities involved in the present day of bank's This is the age of cards with rapidly growing upwardly mobile middle class in India being drawn to the "Plastic money" culture. The late eighties and the early nineties have witnessed a rapid growth in the card market in India with increasing number of banks offering card facility, more establishments willing to accept them in the place of cash, and more consumers finding the concept to be a convenient mode of making payments. Hence, the Indian card market is bubbling with activity, with both Indian and Foreign banks trying to expand their presence. The market is growing rapidly at 30-40% every year and is racing at 5 million cards from 7.5 lakhs cards at end of 1993. In 2000 there were 40 lakh 50 thousand cardholders as compared to 10lakh 20 thousand in 1994. At present card business is earning upto RS. 10,000 crores as compared to 1,900 crores in 1995. India will certainly be among three top card markets in Asia Pacific region by the 21St century along with China and Japan. Introduction to the study: With financial liberalisation, growth of new institutions and new attractive instruments in the financial markets, banking industry over the world is fast undergoing radical changes in its framework and operational modalities. Banks are diversifying for improving profitability, increasing absolute profits, expanding the volume of banking business and making the bank financially a viable unit. So, the expanding and diversifying banking system and complexities involved in the present day of bank's functioning in general compel banks to offer the best customer services. The present day customers expect more than allied and incidental services from the banks that are conducive to their main business of banking. The situation thus compels the banks to raise to the occasion and be ready with several other needs, services, schemes, for the benefit of customers and the public, which are allied to the banking business. So, they have diversified into a number of areas such as Merchant Banking, Leasing, Hire purchase, Mutual funds, Housing finance, Factoring, Venture capital besides some advisory services and Credit cards. The last one and a half decades have witnessed a boom to consumer market due to increase in income levels and standard of living. Consequently the spending needs relating to travel, entertaining, purchase of consumer goods, etc have gone up in tune with the growing sophistication of the Indian economy. The increase has created a need for short period finance, for relatively small amounts, more for the purpose of convenience of expenditure operations than financing as a primary necessity. So increasing affluence combined with increasing complexity of life and increasing insecurity has led to the phenomenon of CARDS. They have come into operation during the last two decades and the same has assumed considerable importance during the last few years. -Card- otherwise known as "PLASTIC MONEY" is widely used by the consumers all around the world. They provide convenience and safety to the consumers. They are a good substitute of cash and cheque. It saves the time and inconvenience of going to the bank for cash withdrawals. It is enough for the cash holder to carry only card with him while shopping, travelling etc. ATM Cards: ATM card is a document .that enables an individual to withdraw cash at specified branches through debit to their saving or current accounts by use of Automatic Teller Machines. As these cards are operated through "Automatic Teller Machine", they are known as ATM cards. Some banks are offering ATM cards, free of cost to their saving and current account holders. In general sense, ATM is known as ANY TIME MONEY, since this facility is available for 24 hours a day and also on holidays and non-banking hours. They are located not only at specified bank branches but also at other busy places such as shopping complexes, restaurants, hospitals, Petrol bunks etc. Having to withdraw from our own assets, there is no fear of overspending like credit card. In the case of bank, cash withdrawals have to be done at the same branch where the customers deposit cash. But the ATM card can be carried anywhere and can be used in any part of the country and over sometimes any part of the world when the issuer of the card has the facility of international acceptance. The introduction of the ATM cards brought up dramatic changes in withdrawing money. The nationalized banks, private sector banks and foreign banks are playing an important role drawing a number of people to become ATM cardholders through different facilities, and so the number of ATM cardholders is increasing and is expected to increase much more. Visakhapatnam is a cosmopolitan city. It is the second largest industrial city after Hyderabad in Andhra Pradesh. It is a good tourist place and hence, service sector plays a dominant role in Visakhapatnam. Banking sector in Visakhapatnam is flourishing with its activities day-by-day. Because of this growth, both Indian and Foreign banks are offering numerous services to their customers. Cards are playing major role among various financial services rendered by banks in Visakhaptnam. State Bank Of India (SBI) is the largest nationalized bank in India with its seven associates, State Bank Of Hyderabad (SBH) as a subsidiary o€ State Bank of India (SBI) occupies second place among its associates in respect of its profits, branches, assets, employees etc. The State Bank is having the largest network of 4,453 ATM services in the country and is continuing to expand fast. SBH in Visakhaptnam is running profitable business and increasing its activities day-by- day. There are about 20 branches of SBH and 15 ATM centers of SBH in Visakhaptnam rendering services to its customers to the maximum extent possible. State Bank of Hyderabad (SBH) launched its first ATM-cum-DEBIT card on June 1st, 2004, which bears the logo of Maestro on the face of it. It is presently offering two exclusive varieties of ATM cards, having the features of both ATM card and Debit card with various benefits. They are 1.State Bank Cash Plus Domestic Card and 2. State Bank Cash Plus International Card. State Bank of Hyderabad (SBH) is offering free ATM card to its savings and current account holders. Using State Bank Cash Plus Card, cardholders can transact free of cost at the ATMs of SBI and its associates. Day-by-day the usage of ATM cards is increasing due to the convenience and safety offered by them. So, here an attempt is made to know why people are more interested in using ATM cards. Objectives of the study: To draw a profile of a urban ATM cardholder. To identify the factors influencing the people to use ATM cards. To assess the benefits of ATM cards to the cardholders. To assess how, where and when ATM cards are used. Methodology Of the study: I have adopted both Primary and Secondary data methods of data collection. The secondary data was collected from the books, annual reports, websites etc of the bank selected for the study. The Primary data was obtained by conducting a survey on ATM cardholders in and around Visakhapatnam. From the information given by the Bank employees, it was understood that the usage of ATM cards is widely prevalent among salaried, Businessmen, students, retired, housewives etc. The areas where these people reside were divided into six main areas in the city and selected for the study. Care was taken to see the presence of SBH ATM at each area selected. Sample size: A sample size of 120 SBH ATM cardholders was selected for the study in Visakhapatnam. In view of constraints of time and money only one tank (SBH) was selected for the study and the sample size was kept small. Questionnaire and its design: Questionnaire for the present study was designed to know the usage of ATM cards. For the convenience of answering the Questionnaire it was mainly divided into personal and other details. All type of questions like multiple choice questions, dichotomous questions, open ended questions and ranking questions were used. Analysis on usage of ATM cards: A Survey on usage of ATM cards was done by taking into consideration both personal and other factors. Gender of ATM Card holders: Gender Wise analysis showed that 85% of them were male and 15% of them were female. It clearly depicted that the usage is widely prevalent among Men than Women. This may be due to the following reasons: men are more educated than women and they are economically stronger than women. It showed that female cardholders were not tapped fully and they were not given dominance position in spending the money. Age group of ATM Card holders: Age was considered as an important parameter in the study as the needs, wants, interests, capabilities, of a person vary with age. It was seen that 42.5%of ATM cardholders were in the age group of 20-29 years, 23.33% of 30-39 years, 12.5% of both 40-49 years and below 20 years, 5% of 40-49 years and 4.17% of above 60 years. The above information highlights that majority of the ATM card holders were in the age group of 20-29 years, the age where most of the people complete their education and enter into earning phase. They spend most of their time outside with friends and colleagues. They find pleasure in spending the money, as many of them do not have family responsibilities at this age. They tend to spend substantial amount on personal consumption items, food, clothing, transportation, luxury goods, entertainment etc. There is more individuality in spending their money. Monthly Income of ATM cardholders: Monthly income of card holders was taken into view as the level of spending money depends upon economic position of consumers. Though 120 ATM cardholders have been contacted, information was gathered from 100 respondents only as 20 of them were students, provided the card by their parents. It showed that 37% of the card holders where in the income group of Rs.5,000/- to 10,000/- followed by 34% in the income group of Rs.10,000- to 20,000/- and 13% in the income group of below Rs.5,000/-, 11% in the income group of and Rs.20, 000/- to 30,000/- and 5% in the income group of above Rs.30, 000/-. It revealed that majority of the card holders were in the income group of Rs.5,000/- to 10,000/-. This shows that they may be in the age of 20-29 years whose income is low relative to future earnings, since most of them just begin their careers. They spend majority of the money they earn. They do not have family burdens. They find pleasure in spending money. Occupation of ATM card holders: Occupation also influences consumption patterns. It showed that 49.17% were salaried employees, 20.83% were students, 15% were in business, 6.67% were retired persons, 5% were housewives and 3.33% belonged to other categories. It was observed that salaried employees where in majority when compared to other people. This may be due to following reasons: For salaried employees their organizations directly deposit their salaries to the banks. Some organisations are offering card to their employees. So employees draw their salaries by using ATM cards. Next majority comes students. Parents feel safety in giving card to their children so that they need not maintain large amounts of cash and withdraw whenever they are in need. And also they can have individuality in spending the money. Influencing factors of ATM cardholders Influencing factors play an important role in the usage of ATM cards as the interest of a person to purchase a product depends to a large extent on them. It was observed that 61.67%of ATM card holders were influenced by the bank employees in having a card, 20.83% were influenced by friends and 7.5% influenced by both advertisement and word of mouth. A very insignificant portion of them were influenced by other factors like magazines, websites etc. Many banks were offering free ATM cards for their saving and current account holders. This could be the main reason for the bank ranking as major influencing factor. Banks find cards as profitable business with less staff and more turnovers. Bank finds it as convenient since the work is reduced in attending customers. Preference of ATM cardholders: Preference of ATM card holders was taken into consideration to know the usage pattern and if ATM cards had any parlance with the factors opted for. Analysis showed that 46.67% preferred it for convenience, 20% for Flexibility, 18.33% for Security, 9.17% or Prestige, 5% for Features and 0.83% for all the factors. It can be inferred that the main reason to prefer ATM cards is mainly due to the convenience offered by the cards. It reduces carrying large amounts of cash in their wallets, as ATM centers were present almost in all the places. They are a good substitute for cash and cheque. ATM centers are available 24 hours even in non-banking hours and holidays and provides any time banking facilities. Having withdrawn from our own assets, there is no fear of over spending like credit card. And also it occupies less space compared to cash. Situations when ATM card is used by the cardholders : The reasons why people were using the ATM cards were considered essential in the study of usage analysis of ATM cards. It was noted that 40% of the cardholders were using the cards for other purposes, 25.83% for shopping, 19.17% for bill payment and 15% while travelling. The analysis showed that majority of the cardholders was using the cards for other purposes other than shopping, traveling, bill payment etc. People can draw money whenever they want instead of drawing lump sum at a time to meet their petty expenses. These expenses frequently occur rather than above said expenses. So, people are mostly using the card for other purposes. Frequency of usage of ATM cards by the respondents: Frequency of usage of ATM cards is directly related to the present study. It was observed that 1.67% were using the ATM card only once in a month, 9.17% Twice in a month, 25% thrice in a month, and 64.16% were using their card four or more times. The trend shows that people were more and more interested in using their cards more than four times in a month. This may be due to following reason: people can draw money whenever they want instead of drawing lump sum at a time even in holidays and non-banking hours. As ATMs are available at any place people feel easy to carry less cash and withdraw cash from ATM's at any centers they visit. Time taken by the card holders at the ATMs: In-fact, the idea of having an ATM card is to save the time of going to the bank for cash withdrawals. So, time was taken as important factor in the study. The information highlights that 45% were taking 2 minutes time in withdrawing cash from ATMs, 23.33% taking 3 minutes time, 21.67% taking 1 minute time, 3.3% of them taking 4 minutes time and 6.67% taking more than 5 minutes time at ATM centers to withdraw money. It was noted that most of them were taking 2 minutes time in withdrawing cash from ATM's. The time that is very low when compared to banks. And people can withdraw from their nearest ATM's whenever they are in need instead of going to the bank every time for cash withdrawals. Time is saved and inconvenience is also reduced to a greater extent by the cardholders. Time taken for solving complaints for ATM card holders: The time taken for solving complaints of ATM cardholders bears a direct impact on the usage of ATM cards by the cardholders. It was noted that 38.34% of the card holders were not having any complaints so far and were satisfied with the working of ATMs.25.83% of card holders said that their problems were solved within three days followed by 16.67% whose complaints were solved very quickly, 10.83% of them said that their complaints were solved within a week and 9.33% said that more than a week was taken to solve their complaints. The analysis depicted that majority of cardholders were not having complaints. So we can conclude that the functioning of ATM was good. Problems faced by card holders in the areas of ATM functioning : The analysis showed that 29.17% of card holders did not have any problems in ATM functioning, 23.33% faced problems in other areas like non-working of ATM Machines in non-banking hours etc, 22.5% in transaction limits, 18.33% faced problems in help in using the card and 6.67% faced problems in getting the cards. As the majority of cardholders did not face any problems we can conclude that the functioning of the ATMs was good. We can also state that people were very much tuned to the modern technology in using ATM cards. Banks were also offering good working ATM services to their customers. Feeling of cardholder regarding service rendered by ATMs: Feeling of cardholders regarding service rendered by ATMs is important factor to be studied to make them as regular customers. It depicted that 52.5% felt that the service rendered by ATMs was very good, 25% felt that the service was good and17.5% felt that service was satisfactory. A very significant portion felt that service was not satisfactory i.e., 5%. It concluded that majority of the card holders felt that services rendered by ATMs was very good. This may be due to the safety and convenience provided by the ATM and solving the complaints within a reasonable time. Findings of the Study: After conducting a survey on the usage of ATM cards, the following are the findings of the study. Profile of ATM Cardholders: Mostly the ATM cardholders were Male. A major portion of ATM cardholders were in the age group of 20-29 years belonging to the salaried class and having a income range of Rs.5,000 to RS.10,000. Influencing factors of ATM Cards : Majority of the cardholders were influenced by the bank employees. Some of them were influenced by their friends, advertisements etc. They were using the card to avail the benefits of Convenience, Flexibility, Security, Prestige etc. Benefits of ATM Cards : The card holder need not carry and just take card with him during his travel or shopping. It is helpful in emergencies and even in holidays and non banking hours. There is no fear of over spending like credit cards. There is 24 hours helpline to card holders of certain cards. Usage of ATM Cards: Almost all the card holders are able to operate ATM Machines by themselves. They were using the cards to meet their family, educational and Medical expenses etc. Majority of them were spending Rs.5,000 on their ATM card by using it more than four times in a month and taking two minutes time for each cash withdrawal. They felt that the service rendered by the ATMs were good as they do not face any problems and are not having any complaints so far. Conclusion: In the banking sector, day-by-day the usage of the ATM cards has become wide spread and in every corner, the application more. It was found from the study conducted that most of the respondents prefer ATM cards because of many attributes associated with it. The Indian card market is beginning to show streaks of competition with both Indian and Foreign banks in the card game. It is bound to brighten up and register an exponential growth in the coming years. India is poised to become the second biggest market in the world next only to U.S. The large middle class segment of our population, increasingly becoming consumerist, bordering on 20 crores should easily provide the base for such growth. Even if 5% of this population is going to resort to card usage, we see a number of 1crore. That is, there is potential for one crore cardholders in the country in the nearest future as compared to the paltry cardholder population of less than 8 lakhs. As found from the study, card is being used by almost all the sections of the people. So, banks should concentrate on increasing the volume of the number of ATM Card holders by providing various user-friendly schemes. They have to concentrate more on promotional activities in order to create bank's image in the minds of card holders and try to balance the quality and service to remain as market leader. To conclude finally, ATM cardholders were satisfied with the usage of ATM cards. In the future, card is going to occupy the place of money. The ideal way is to go for the CARD. Article Source: http://www.saching.com About Author / Additional Info: Additional Articles: * How To Use Useful Free Blogging Software ? * Women Freedom: Do present day women enjoy full freedom as men? * Irrelevance of college syllabuses * MUSIC MUST BE ORGANISED | Going to a music school for a good career. * Your peace and happiness resides inside you. Does this article violate or infringe on your copyright ? 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