A STUDY OF

ATM & DEPOSIT MACHINE

BACHELOR OF COMMERCE
(BANKING & INSURANCE)
SEMESTER V
(2015-16)

SUBMITTED BY
RAJPUT MANPREET SINGH
UNDER THE GUIDANCE OF
PROF. SAMMA NARANG

SINDHU EDUCATIONAL SOCIETY

SWAMI HANSMUNI MAHARAJ DEGREE COLLEGE
OF COMMERCE
NETAJI ROAD, ULHASNAGAR-4

A Study of ATM &

Deposit Machine
Business CRM Services With ATMs & Deposit Machine
Saturating The Market And Declining Revenues Per
Machine, Forward-Looking Financial Institutions Are
Rethinking Their ATM & Deposit Machine Strategy And
Moving Toward Exciting New Technologies.

A STUDY OF
ATM & DEPOSIT MACHINE
Bachelor of commerce
(Banking & Insurance)
Semester V
(2015-16)

Submitted
In Partial Fulfillment of the requirements for the Award of Degree of
Bachelor of Commerce - Banking & Insurance

By
RAJPUT MANPREET SINGH
Seat No-1150303

UNDER THE GUIDANCE OF

PROF. SAMMA NARANG

SINDHU EDUCATIONAL SOCIETYS

SWAMI HANSMUNI MAHARAJ DEGREE
COLLEGE OF COMMERCE,

CERTIFICATE
2015-2016
This to certify that, RAJPUT MANPREET SINGH of B.com (Banking and
Insurance) Semester-V (2015-16) has successfully completed the project on
A STUDY OF ATM & DEPOSIT MACHINE under the guidance of Prof.
SAMMA NARANG.
Date:Place- Ulhasnagar.

(Prof. Mrs. Samma Narang)

(Prof. Vandana Kodwani)

Project Guide

BBI Coordinator

External Examiner

(Dr. Prema Gurbaxani)

Principal

Rajput Manpreet Singh

Seat No. 1150303

DECLARATION

Date-

I, RAJPUT MANPREET SINGH the student of B.com (Banking & Insurance)

Semester- V (2015-16) hereby declare that I have completed the project on A
STUDY OF ATM & DEPOSIT MACHINE successfully.

The information submitted in this project is true and original to the best of my
knowledge.
Thank you,

Yours faithfully,

RAJPUT MANPREET SINGH

ACKNOWLEDGEMENT

At the beginning, I would like to thank Almighty GOD for his shower of
blessings. The desire of completing this dissertation was given a way by my
guide Prof. Samma Narang. I am very thankful to her for the guidance,
support and for sparing her precious time from a busy and hectic schedule.

I am thankful to Dr. Prema Gurbaxani, Principal of SHM College where I

am a student in Commerce. My sincere thanks to Prof. Samma Narang who
always motivated and provided a helping hand for conceiving higher
education.

I would fail in my duty if I dont thank my parents who are pillars to my life.
Finally, I would express my gratitude to all those persons who directly and
indirectly helped me in completing dissertation.

Rajput Manpreet Singh

DECLARATION

Date-

I the undersigned PROF. SAMMA NARANG, have guided RAJPUT

MANPREET SINGH for his project, he has completed the project A
STUDY OF ATM & DEPOSIT MACHINE successfully.

I, hereby, declared that information provided in this project is true as per

student to the best of my knowledge.

Thank you,

Yours faithfully,

Prof. Samma Narang

Literature Review

The purpose of this paper is to review literature on the impact of adoption of

ATM technology from the perspective of customers, banks and suppliers. As
per the changing demand of the customers, innovative software solutions are
regularly released. Similarly, banks are deploying CRM technology to
facilitate personalized needs of customers on one to one basis. Suppliers of
ATMs are also under pressure to provide ATMs to banks which can meet the
latest customer needs.

Abstract:

Indian banking system touches the lives of millions of people and it is growing at a fast
pace. Banking industry in India is facing number of challenges like changing needs and
perceptions of customers, new regulations from time to time and great advances in
technologies. The pressure of meeting these challenges have compelled banks to change the
old ways of doing business. The research paper focuses on how the technology has
transformed the face of banking in India. Indias banking system has seen some major
financial innovations in the past decades which lead to tremendous improvements in
banking services and operations. The various innovations in banking and financial sector
are ATM, Debit and Credit cards, Deposit Machine and many more value added products
and services. This paper also highlights the benefits and challenges of changing banking
trends. Banks are investing heavily in adoption of these innovations. The need of hour is to
design such a system that encourages the efficiency of investment in innovations and
widens the gap between revenues and costs involved with reference to technological up
gradation

Sr. no.

Content

Pg.
No.

INTRODUCTION

01-13

UNIT-1

1.

Introduction To ATM

14-17

a. Introduction
b. ATM Meaning
c. ATM Network
d. Inter-Connectivity Of ATM Network
e. Hard cash transaction

2.

18-21

Review Of ATM Machine

3.

a.
b.
c.
d.

Brief History Of Bank ATM

Features Of ATM
Self-Service Kiosks
Business & Customer Benefit

22-27

Detail Study Of ATM

a. Versatility Of ATM
b. Challenges in Using ATM
c. ATM As An Effective
Channel

Marketing

Sr.
no.

4.

Content
Role Of RBI

Pg.
No.
28-33

a. Changes Made By RBI

b. New Rule For ATM Customer
c. Reason For Framing New Rules By RBI
d. Comparison of ATM usage charges

5.

Introduction To ATM Encryption Method

a.
b.
c.
d.

Introduction
Hardware & Software
ATM Encryption Method
Smart Intruders

34-36

UNIT-2

1.

Introduction To Cash Deposit Machine

a.
b.
c.
d.
e.

Sr. no.

37-40

Cash Deposit Machine

Why Use A CDM
How Does CDM Help You
Salient Features
Advantages

Content

Pg.

No.

2.

Detail Study
a.
b.
c.
d.
e.

41-44

System Overview
CDM Provide Busy Customer Service
Customer Requirement
Benefits
Customer Require Fast Technology

UNIT-3

ANALYSIS OF DATA
45-50

Findings
Conclusion

51
52

Questionnaire

53-54

Bibliography

55

UNIT-1

Automated Teller Machine

(ATM)

CHAPTER-1
INTRODUCTION TO ATM MACHINE

Introduction

Banking industry in India has also achieved a new height with the changing times.
Customer services and customer satisfaction are prime responsibilities of banks now days.
Information technology has given rise to new innovations in the product designing and
their delivery in the banking and finance industries. Technology offers a chance for banks
to build new systems that address a wide range of customer needs including many that may
not be imaginable today. Banking through internet has emerged as a strategic resource for
achieving higher efficiency, control of operations and reduction of cost by replacing paper
based and labor intensive methods with automated processes thus leading to higher
productivity and profitability. Financial innovation associated with technological change
totally changed the banking philosophy and that is further tuned by the competition in the
banking industry. Challenging business environment within the banking system create more
innovation in the fields of product, process and market.
As the most highly used customer access channel in retail banking, the ATM is a critical
customer touch point. Recent ATM innovations offer financial institutions the
opportunity to transform the ATM from a cash dispenser to a customer relationship
management tool, helping to enhance loyalty among all customers, particularly those who
almost exclusively use the ATM. From transaction personalization to customized, oneto-one marketing capabilities, the future of ATMs is in their value as customer
relationship and marketing vehicles, allowing financial institutions to mitigate the trend
of declining ATM profitability while maximizing the potential of their ATM programs.

.15

ATM
ATM means neither AVOIDS TRAVELING WITH MONEY nor ANY TIME
MONEY, but certainly implies both. Slim ATM cards are fast replacing confounding
withdrawal forms as a convenient way of getting your money from banks. In a way, they
are rewriting the rules of financial transaction. A smart person no longer needs to carry a
wallet-full of paper money on his person. All he needs to do is fish out an ATM (automated
teller machine) card, insert it in the slot, punch in a few details and go home with hard cash.
Automated teller machines (ATMs) were the first well-known machines to provide
electronic access to customers. With advent of Automatic Teller Machines (ATM), banks
are able to serve customers outside the banking hall. ATM is designed to perform the most
important function of bank. It is operated by plastic card with its special features. The
plastic card is replacing cheques, personal attendance of the customer, banking hours
restrictions and paper based verification. ATMs have made hard cash just seconds away all
throughout the day at every corner of the globe. ATMs allow you to do a number of
banking functions such as withdrawing cash from ones account, making balance
inquiries and transferring money from one account to another using a plastic, magneticstripe card and personal identification number issued by the financial institution. The Indian
ATM industry has seen explosive growth in recent times. ATMs represent the single largest
investment in the electronic channel services for the Banks. In India, HSBC set the trend
and set up the first ATM machine here in 1987. Since then, they have become a common
sight in many of our metros. 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. While ATMs facilitate a variety of banking transactions for customers,
their main utility has been for cash withdrawal and balance enquiry. As at the end of
October 2007, the number of ATMs deployed in India was 31,078. According to some
estimates the total cash movement through ATMs across India was around Rs. 70,000 crore
in FY 06. Clearly, industry watchers forecast a bright future.

.16

For ATMs in India. While the ATM is a great service for customers, for the banks it means
immense savings on the cost of operations. While a typical cash transaction carried out in a
banks branch premise would cost Rs 40 that in an ATM will only cost Rs 18translating into
a cost saving of Rs 22 per transaction.

First ATM in India

Hong Kong and Shanghai Banking Corporation (HSBC) introduced ATM concept in India
first time in 1987. But now almost every bank provides ATM facilities to their customers.
ICICI bank has most number of ATM centers across India. The other banks UTI, HDFC
and IDBI are leading in providing ATM facilities to their customers. Public Sector Banks
are also taking the installation of ATMs seriously for Indian market. They are either setting
up their own ATM centers or entering into tie-ups with other banks. The Corporation Bank
has the second largest network of ATMs amongst the Public Sector Banks in India.

ATM Networks : The ATMs of a bank are connected to the accounting platform of the
bank through ATM switches. Inter-bank ATM networks are created by setting up apex level
switches to the use of ATM cards of one bank at the ATM(s) of other banks for basic
services like cash withdrawal and balance enquiry. Banks owning the ATMs charge a fee for
providing the ATM facility to the customers of other banks.

Inter-connectivity of ATM Networks for enhanced access

Inter-connectivity of ATM Networks provides access to the customers to use any ATM
in the country irrespective of the bank with which the customer is banking. There are a
number of ATM network switches such as CashTree, BANCS, CashnetMitr and National
Financial Switch (NFS). In addition, most ATM switches are also linked to VISA or
MasterCard gateways.

Why do banks prefer online transactions rather than hard cash? How are they
benefited?
Money in the form of bills or coins; "there is a desperate shortage of hard cash"
Electronic money, or e-money, is the money balance recorded electronically on a card.
Another form of electronic money is network money, software that allows the transfer of
value on computer networks, particularly the internet. Electronic money is a floating claim
on a private bank or other financial institution that is not linked to any particular account.
Thus, electronic money is used rather than hard cash..

17

CHAPTER-2
REVIEW OF ATM MACHINE

Brief History of the Banks Having Large No. of ATM Channels

The State Bank of India (SBI) is the oldest and largest bank in the country. Its origins
go back to the first decade of the 19th century, when the Bank of Calcutta was established
on 2 June 1806. The bank got its present name after an Act of Parliament in May 1955 and
the State Bank of India was constituted on 1 July 1955. Today, SBI has a phenomenal
9,559 branches and its ATM network is spread across 6,473 of its own locations& total
8,000ATMs including of those of its associate banks.
ICICI Bank India is the largest private sector bank. Its banking products and financial
services are some of the superior ones. The reach and market of ICICI Bank is unmatched
in India as yet.It offers a countrywide network of 1,000 branches and 3,680 ATMs reaching
out to your doorsteps.
The Housing Development Finance Corporation (HDFC) Bank is one of the first banks in
India to offer its customers the bill pay facility. HDFC Bank is also a leader in online
purchase (using the HDFC Bank DirectPay product). The bank also offers its customers a
free personalized payable-at-par chequebook and services like real time gross settlement
and national electronic fund transfer. HDFC Bank was among the first to receive an in
principle approval from the RBI to set up a bank in the private sector as part of the
liberalization of the Indian banking industry in 1994. The bank has 1,148branches and
1,647 ATMs network spread across the country.

.18

Features of ATM
1. Cash withdrawal
2. Mobile phone recharge vouchers are available
3. Deposit cash and cheques (at selected ATMs)
4. Obtain a summary of balances for all your accounts
5. View and print a mini-statement (last 10 transactions)
6. Transfer money between linked accounts

Using ATMs as self-service kiosks for value-added services

By using self-service channels, consumers can purchase a variety of goods and services
without the help of a sales assistant. These interactive, self-service channels can be applied to a
number of areas.
ATMs still happen to be big crowd pullers for banks. They are now being increasingly used to
provide other services like credit card payments since the interface of an ATM is easy to
navigate, explore and use. It is a logical move to use ATMs to provide other value added
services. This is also supported by the fact that among self-help kiosks, ATMs have the best
penetration in many regions and this density is likely to grow. Currently, an ATM is equipped
with a card reader, a cash dispenser, a cash/envelope collector, and a printer. Using these, a
cardholder can conduct financial transactions such as cash withdrawal, cash or check deposit,
payment of utility bills, printout of mini account statements, and transfer of money between
linked accounts.

.19

Business benefits of using ATMs as self-service kiosks

ATMs provide the following advantages to the customer as well as the business:
1. Enhanced customer experience: ATMs can help enterprises retain and grow their customer
base by enhancing customer experience.
a. Customer convenience: ATMs can extend the transaction hours on bill payments,
ticketing, fee payment, and other transactions beyond office hours and beyond branch
premises to convenient locations.
b. Ease of use: ATMs have a simple UI that most bank customers find easy to use and
are familiar with. As mentioned earlier, many ATMs use local language and
biometrics for authentication, unlike internet or mobile interfaces that require the user
to be net literate, or websites that do not have regional customization implemented.
In many cases, the UI of some websites is not as user friendly.
2. Better quality of transactions: The quality of transactions via ATMs is better than those on
the Internet or mobile.
a. Persistent connectivity: ATMs provide dedicated and assured connectivity, unlike
the internet connection in many regions; ATMs provide dedicated and assured
connectivity.

b. Security: Transactions on ATMs are more secure than those on the internet. The web
is more vulnerable to hacking, viruses, phishing, etc. The introduction of the Europay,
MasterCard and Visa (EMV) standard, biometrics, contactless cards, and mobile
authentication further reduces chances of fraud in ATM transactions.

Customers benefits of Using an ATM

In an ever changing world of technology, everything gets faster, more convenient, and
more technologically advanced. The debit card has now been main stream in most
financial institutions for almost 20 years now. The advantages of using an automated
teller machine for customer are

.20
1. Convenience
A debit card can be convenient in so many ways. If you need access to cash
and are either far away from your bank or after bank hours, you can still get

cash if you need it. Using a debit card speeds up lines at any place of business
by saving you from having to write a check; just swipe and your purchase is
completed. Most debit cards have the VISA or Master card logo which is
accepted almost anywhere, worldwide.

2. Protection
There is several ways that a debit card offers protection. First, if your cash is
lost or stolen, it cannot be replaced, it is gone. A debit card on the other hand
can be cancelled and a new one can be ordered. If someone did get the card or
card number before you realize it is gone, it has daily limit of Rs.500 for cash
or Rs.3000 for purchases. In addition, you are not liable for fraudulent
purchases. An unauthorized transaction can always be disputed and refunded.

3.

Budget

When a debit card is used appropriately, it can help you budget much more
than a credit card. Most debit cards stop allowing transactions once your
balance is at zero, which also can save on fees such as overdrafts.

.21

CHAPTER-3
DETAIL STUDY OF ATM MACHINE

Tapping into the versatility of ATMs

ATMs have become the most popular channel of consumer interaction and the most used
marketing tool to reach a variety of geographies and increase regulated financial
penetration. The latest trend in unattended devices with touch screens combines a secure
payment solution with a multimedia delivery platform capable of delivering targeted
branding, promotions, etc.
Given the wide range of user demographics, ATMs employ a simple and easy-to-use
graphic user interface (GUI). They employ a limited set of keys, each transaction can be
completed in a few steps, each step is accompanied by an on-screen prompt for the user, the
on-screen text can also be displayed in a local-language, and the text is
Usually accompanied by images to enhance understanding. This makes ATM kiosks
extremely user friendly. Using ATMs, some of the potential value added services that could
be dispensed are:
1. Bill payments
Long queues at collection centers or insufficient literacy for online payments pose a
serious problem for consumers while paying utility bills. Hence, bill payment using
ATMs will be a welcome feature for most consumers. Customers can register their
utility accounts with banks. ATMs can then be used to check the dues and pay bills.
Since these payments are linked to bank accounts, the approval of such payments
will be faster and easier as well. On debiting their accounts, customers can receive
Printed receipts for the transactions. This can be extended to accept credit card
payments, institution fee payment, making charitable contributions, etc.

.22

2. Deposit automation using check imaging

Also known as envelope free deposits, this offers functionality to scan a check for
faster and assured processing. This is a win-win for customers who are able to
ensure faster and assured processing as well as for banks who can reduce incidents

of lost checks as well as the cost of resource utilization in check processing. This
technology can be extended to offer customers a way to scan and pay bills at the

3.

ATM, or to complete a transaction that requires scanning a document.

Sale of financial and other products
ATMs can be used to sell products and services such as travel tickets, mobile phone
recharge cards, financial products, and movie and theatre tickets, etc. The in-built
printer can produce the relevant ticket, statement, or receipt, and the ATMs can

facilitate secure and approved payments.

4. Information kiosks
ATM owners can charge customers a fee for providing non-financial information.
For example, the Union Bank of India has used ATMs to establish Village
Knowledge Centers (VKCs). VKCs target the socio-economic development of the
local rural population in remote areas by giving them information on various vital
inputs such as weather, fertilizers, price of crops, etc. The bank also offers
counseling via financial education centers at 51 of the 200 VKCs.
5. Third-party advertising
Banks can effectively use the wait time at ATMs to promote brands, products, and
services based on customer information available in their accounting and CRM
databases. These can then be converted into potential sales. For example, if a
customer has been making regular payments for the purchase of a product category,
then advertisements and offers for those particular products can be displayed. If
customers are interested in the advertised service or product, they can use the ATM
to print a receipt with the contact details of regional sales representatives or the
location of the nearest outlet.

.23
6. Remittances
ATMs can be used to make cross-border remittances for migrant workers and
tourists. This reduces the delay inherent in postal money orders or wire transfers,
and eliminates the dependence on intermediaries and the need to travel to a brickand-mortar outlet. A recent news article quotes the Governor of the Reserve Bank of
India (RBI) on how people without bank accounts can use ATMs to receive money.
7. Public announcements

ATMs can be used to make public announcements and disburse important

information. For example, police in the UK have used ATMs to publicize their
dont drink and drive campaigns.

Challenges to consider in using ATMs as a self-service channel

Customers expect transactions across channels to have increased security and accessibility, and
they also demand timely delivery of services. Before adopting ATMs to propagate self-service
in various payments and non-financial transactions, ATM owners must review the challenges
in doing so.
1. Secure payment: ATM owners must assure customers that payments through this
channel are secure. The wide adoption of secure certified verification EMV
(commonly known as chip and pin) is a major step towards providing this
assurance. This method can authenticate a card and it can also verify a customer's
identity. This secures the payment and drastically reduces chances of fraud.
2. Software threats: While ATMs are more foul-proof than the internet, they can be
susceptible to malware attacks and anti-skimming jammers. ATM owners can
reassure users by providing effective security solutions to protect against targeted
threats and attacks.
3.

Regulatory norms: It is necessary to comply with local regulations before deciding

.24
to deploy any of these services. For instance, in some countries regulatory
authorities do not allow advertising for third-party products in ATM kiosks. In other
cases, white-label ATMs may not have regulatory acceptance.
4.

Consistent and timely services: The best way to attract customers is to ensure that
transactions are fast, secure, and consistent. Though speed is of essence, the large
volume of consumer payment and service transactions, diverse range of
technologies and multi-vendor terminals can load the ATM network infrastructure
heavily. Enterprises must ensure persistent network communications and application
performance for uninterrupted service availability. ATM owners must also be aware
of third party hand-off issues and take steps to guard consumer interests.

Material Customer Satisfaction Level (MCS)

Material customer satisfaction level has been examined on the basis of three variables
i.e. reasonability of the fee charged, frequency with which problems are faced and the
post purchase behavior of the customers.

1. Fee Charged
Fee charged by the banks is one of the variables taken for checking customer
satisfaction level. If customer feels that the fee charged by the bank is reasonable
then he is satisfied and vice-versa. Five degrees of reasonability have been taken
and they are coded as 5, 4, 3, 2, &1. There is direct relation between fee charged
and customer satisfaction.

2. Problems Faced
Second parameter for measuring MCS levels problems faced by the consumers
while using ATM of a particular bank. If consumers are facing problems more
frequently, customer satisfaction level will be less and vice-versa. There is indirect
relation between the problems faced and the customer satisfaction. Three degrees
namely often, rarely and never have been taken and they have rated as 3, 2, & 1
respectively.

.25

The purpose for which ATM is most often used

ATM does not mean the plastic card and PIN (Personal Identification Number) but the
services for which you can use it are the most important part. These services are
cash/cheques deposit, fast cash withdrawal, view account balances & mini statements and
request a chequebook or account statement.

Use Your ATMs as an Effective Marketing Channel

Using advances in technology to transform the ATM into an effective marketing channel
provides financial institutions a host of benefits, and for return on marketing investment,
the ATM has the potential to become a profit center once again.
1. Customization
Through transaction personalization options, customers can preset their
preferences for the types of transactions they want to perform and the
information they want to receive, which leads to feelings of personalized
relationships and loyalty.
2. Brand reinforcement
ATM screen graphics and messaging can be made consistent with the financial
institutions other marketing channels, reinforcing messages with each ATM
transaction.
3. Cross-sell opportunities
One-to-one targeted messaging via an ATM can result in higher response rates
than from other marketing channels. Additionally, financial institutions have
the opportunity to cross-sell to non-customers who use the financial
institutions ATMs.

.26

4. Customer Data
Marketing programs can be refined even further to target customers based on
user information and specific responses (i.e., customer data) captured at the
ATM.
5. Cost savings
ATM marketing campaigns can be less expensive to create and distribute than
marketing through traditional direct channels.
6. Advertising
Some financial institutions have partnered with local merchants to deploy
ATMs in their locations, offering coupons and other incentives to drive ATM
traffic and increase merchant ticket sizes.

.27

CHAPTER-4
ROLE OF RBI
Changes Made By Reserve Bank of India (RBI)
On 15 August, 2014, the 68th Independence Day, our Prime Minister Narendra Modi
announced a scheme called PradhanMantri Jan-DhanYojana in the cause of financial
inclusion in our country for the benefit of millions of families who do not have bank
accounts so far. Under this scheme every bank account holder will be given a RuPay
brand debit card with an accident insurance cover of Rs1 lakh guaranteed for each poor
family, so that all such families are covered with accident insurance to meet any crisis
in their lives.

A day before this announcement by the Prime Minister, the Reserve Bank of India
(RBI) announced certain changes to the ATM facility offered to bank customers and the
charges levied for withdrawals through ATMs with effect from 1 November, 2014.
According to the new RBI guidelines that come into effect from 1 stNovember 2014,
savings bank account holders in metropolitan cities would be allowed only three
transactions from ATMs of other banks and five from the same bank in a month. For any
ATM transaction above the stipulated limit, a transaction fee of Rs. 20 would be charged
to the account holder. The new transaction fee is applicable only for people living in six
metropolitan cities including Mumbai, Delhi, Bengaluru, Chennai, Hyderabad and
Kolkata. People living in smaller towns and other centers would continue to enjoy five
free monthly transactions per month from the ATM of other banks and the charges for
them include Rs. 20 for each cash withdrawal and Rs 9 for non-cash transactions.
Account holders of zero balance and other no-frills accounts in non-metros are
exempted from such transaction charges as of now.

.28

New Rules for Bank Customers

The transaction fee has been increased from the earlier limit of Rs. 15 to Rs.20 and the
number of free transactions decreased from five to three for ATMs of other banks and
five from the same bank in a month. Another important change in the new RBI guideline
policy for ATM transaction fee is the fact that all ATM transactions including cash
withdrawal, balance enquiry and changing of PIN number etc would be considered as an
ATM transaction unlike in the past when balance enquiry was not considered a
transaction as such.

The inter banking fee charged by various banks through ATM services will also increase
since banks are using the fee as an incentive to install more number of ATM machines.
While all the above reasons have played their role in the decision to some extent the
game clincher has been Reserve Bank of Indias long term plan to promote the use of e
- transfers and cashless transactions as much as possible to avoid the use of any black
money in the system. The rise in ATM transaction fee is largely seen by financial experts
as a sum culmination of all of the above factors.

.29

Reasons for Framing New Rules by RBI

The charges for ATM usage may be an unpopular decision taken by the Reserve Bank
of India, the limit in free transactions is justified by the apex body considering high
expenses for managing ATMs across the country. With an increasing number of robbery

attempts on various ATMs especially in isolated areas and in semi urban and rural areas,
the banks have been forced to shell out funds to install a security mechanism apart from
using CCTVs and manual security guards wherever possible.

With the Reserve Bank of India laying down strict security guidelines not to leave any
ATM unmanned or without security cameras and other measures, banks are facing higher
overheads to manage the ATMs .

.30

Comparison of ATM Usage Charges

For People Living in Metropolitan Cities Including Mumbai, Delhi,

Bangalore, Chennai, Hyderabad and Kolkata.

BANK
Same Bank

TRANSACTION
CashTYPE
withdrawal

TRANSACTION LIMIT

Balance Enquiry

5 Free transactions per month. Additional transaction

will be charged at Rs. 20 per transaction

Change of PIN
Mini Statement
Cash withdrawal

Different
Bank

Balance Enquiry
Change of PIN

3 Free transactions per month. Additional transaction

will be charged at Rs.20 per transaction.

Mini Statement

.31

For People Living in Non-Metropolitan Cities, Smaller Towns and

Holders of Zero Balance and Other No-Frills Accounts

BANK

TRANSACTION
CashTYPE
withdrawal

TRANSACTION LIMIT

Same Bank

Balance Enquiry

5 Free transactions per month. Rs.20 is applicable for each

cash withdrawal and Rs.9 for non-cash transactions.

Change of PIN
Mini Statement

Different
Cash withdrawal

Bank

5 Free transactions per month. Rs. 20 is applicable for

each cash withdrawal and Rs.9 for non-cash transactions
charged at Rs.20 per transaction.

Consumer Benefits
ATMs have provided an important expansion of banking services that has benefited all
consumers. Before the introduction of ATMs in the early 1970s, bank customers' access to
their cash was limited to traditional banking hours. Customers often found themselves
waiting in long lines on Friday afternoons just to withdraw enough cash to carry them
through the weekend. ATMs opened a whole new world of convenience by eventually
allowing access to banking services 24 hours a day, 365 days a year. Networks between
banks, such as Plus, Cirrus, and Honor, developed so that customers could have access to
their money through other institutions' ATMs throughout the world. To pay for that service,
banks typically charge a fee to help defray the cost of belonging to the network.
Before the 1990s owners of ATMs typically did not charge other banks' customers for
the use of ATMs; indeed, such surcharges were expressly forbidden by most
networks. But, in the early 1990s, local banks and other ATM owners, who could not
cover the cost of maintaining ATMs that face a high demand for cash withdrawals
from nonlocal banks, pushed for lifting the voluntary ban on surcharges. As a result,
legislatures in 23 states passed laws that allowed individual members of ATM
networks to impose surcharges. Operating an ATM that receives a lot of traffic but

.32

That not many local customers use makes no sense. ATMs generate huge costs, so
banks were unwilling to provide free ATM services to noncustomers.
The reason for that growth is simple: Allowing ATM surcharges has encouraged firms
outside the banking industry, as well as banks, to put ATMs in more convenient locations
where, without surcharges, ATMs may not generate enough bank customer traffic to be
profitable. Those locations include supermarkets, convenience stores, and airports.
Consumers now have the option of paying a surcharge for getting money from the new
machines or going to other, less convenient, ATMs.
Critics argue that without the surcharge consumers would get the convenience without the
fee. In other words, consumers would still get the same service for free. In fact, fees have
played a significant role in making ATMs more widely available. Before surcharges, a
low-cost ATM needed 3,000 transactions a month to break even. Today, with income from

surcharges, the same ATM can break even with only 500 transactions a month. Prohibiting
surcharges would limit the number and location of ATMs and inconvenience consumers. In
effect, government would be levying a "time tax" on consumers by denying them the
choice of convenience and forcing them to travel to their own banks to get cash.

.33

CHAPTER-5
INTRODUCTION TO ATMS ENCRYPTION METHOD

Introduction
ATM also known as Automatic Teller Machine is a simple and yet security banking
service. The basic concept is that an ATM allows an authorized cardholder to conduct
banking transaction without visiting a branch. They are well known for its convenience
to the customers, cost effectiveness to the bank and most importantly it is an extremely
secure banking method.
ATMs rely on authorization of a transaction by the bank via a secure communications
network. Encryption methods are built into the communication network to prevent
unauthorized transactions that could result in losses. This data focuses on Data

Encryption Standard and Advanced Encryption Standard, these are the encryption
standards presently adopted by banks across globe.

Hardware and Software

ATMs contain secure crypto-processors, generally within an IBM PC compatible host
computer in a secure enclosure. The security of the machine relies mostly on the integrity
of the secure crypto-processor: the host software often runs on a commodity operating
system.
In-store ATMs typically connect directly to their ATM Transaction Processor via a modem
over a dedicated telephone line, although the move towards Internet connections is under
way. In addition, ATMs are moving away from custom circuit boards (most of which are
based on Intel 8086 architecture) and into full-fledged PCs with commodity operating
systems such as Windows 2000 and Linux. Other platforms include RMX 86, OS/2 and
Windows 98 bundled with Java. The newest ATMs with Microsoft technology use Windows
XP or Windows XP embedded. [Lockergnome Encyclopedia 2004]

.34

ATM Encryption Methods

ATM transactions are usually encrypted with DES (please refer to the next section) but
most transaction processors will require the use of the more secure Triple DES by 2005.
There are also many "phantom withdrawals" from ATMs, which banks often claim are the
result of fraud by customers. Many experts ascribe phantom withdrawals to the criminal
activity of dishonest insiders. Ross Anderson, a leading cryptography researcher, has been
involved in investigating many cases of phantom withdrawals, and has been responsible for
exposing several errors in bank security. There have also been a number of incidents of
fraud where criminals have used fake machines or have attached fake keypads or card
readers to existing machines. These have then been used to record customers' PINs and
bank account details in order to gain unauthorized access to their accounts. [Lockergnome
Encyclopedia 2004]

Data Encryption Standard

The Data Encryption Standard (DES) is an approved cryptographic algorithm selected as

an official Federal Information Processing Standard (FIPS) for the United States.
[Lockergnome Encyclopedia 2004]
In DES, data are encrypted in 64-bit blocks using a 56-bit key. The algorithm transforms
64-bit input in a series of steps into a 64-bit output. [William Stallings 2003].
FIPS PUB 81, DES Modes of Operation, describes four different modes for using the
algorithm described in this standard. These four modes are called the Electronic Codebook
(ECB) mode, the Cipher Block Chaining (CBC) mode, the Cipher Feedback (CFB) mode,
and the Output Feedback (OFB) mode. ECB is a direct application of the DES algorithm to
encrypt and decrypt data; CBC is an enhanced mode of ECB which chains together blocks
of cipher text; CFB uses previously generated cipher text as input to the DES to generate
pseudorandom outputs which are combined with the plaintext to produce cipher, thereby
chaining together the resulting cipher; OFB is identical to CFB except that the previous
output of the DES is used as input in OFB while the previous cipher is used as input in
CFB. OFB does not chain the cipher. [Federal Information Processing Standards
Publication 46-2 1993]

.35

Advanced Encryption Standard

There are cases where ATMs using DES has been breached within 24 hours. The most
recent solution is to adopt a new encryption standard known as the Advanced Encryption
Standard.
The Advanced Encryption Standard (AES) feature adds support for the new encryption
standard AES, with Cipher Block Chaining (CBC) mode, to IP Security (IPSec).
The National Institute of Standards and Technology (NIST) have created AES, which is a
new Federal Information Processing Standard (FIPS) publication that describes an
encryption method. AES is a privacy transform for IPSec and Internet Key Exchange (IKE)

and has been developed to replace the Data Encryption Standard (DES). AES is designed to
be more secure than DES: AES offers a larger key size, while ensuring that the only known
approach to decrypt a message is for an intruder to try every possible key. AES has a
variable key lengththe algorithm can specify a 128-bit key (the default), a 192-bit key, or
a 256-bit key. [Cisco Systems, Inc. 2004]

Smart Intruders
Behind the friendly appearance of the Automatic Teller Machines, they are actually
protected by some of the most advanced encryption technologies. However, ATM security
requires progressively improving methods to keep up with smart intruders. A clear example
is the upgrade from the Data Encryption Standard to the Advanced Encryption Standard,
which is almost three times as powerful.
In the near future, a new method will be adopted to protect ATMs from intruders with better
technologies. Although, this is a constant battle between intruders and the bank, ATMs are
still a very convenient, cost-effective and secure banking method provided to customers
today.

.36

UNIT-2

Cash Deposit
Machine

.37

CHAPTER-1
INTRODUCTION TO CDM MACHINE

Cash Deposit Machine

The Cash Deposit Machine (CDM) is a self-service terminal that
lets you make deposits and payment transactions by cash. All
successful transactions are immediately credited and customers
will be issued an advice slip confirming the transaction.
Conventionally, depositing cash into your bank account can be a
tedious affair as it has to be done within the banking hours and

you have to fill up a deposit slip and stand in a queue. To make

the cash deposit process more flexible and convenient, banks
have introduced Cash Deposit Machines and are expanding their
availability across different locations to encourage electronic
cash deposit without the assistance of banking personnel.

Why use a Cash Deposit Machine?

With close to 13,000 billion rupees in notes issued in FY 2013-14, RBIs recent data
highlights the fact that 90% of monetary transactions still take place in cash. With the high
amount of cash transactions, the need for an efficient mode to deposit cash is more than
ever before. To facilitate easier deposit of cash, banks allow you to deposit cash through
Cash Deposit Machines.

.38
A Cash Deposit Machine is capable of accepting more cash deposit transaction in
comparison to an over-the-counter cash depository service. For example, banks usually
stop their business transactions by 4 PM. However, people might need to deposit cash
during different times of the day and that is exactly what a Cash Deposit Machine is
designed for.
And with your money getting credited into the desired account in real time, Banks are
pushing to increase the availability of CDMs for customers convenience.

How does the Cash Deposit Machine help you?

Your money gets instantly credited into your account
You do not need to fill up any cash deposit slip or wait in long queues to deposit
cash
You receive immediate receipt
No need to sort and arrange your cash according to denominations
Facilities such as balance enquiry and mini statements are also available on a Cash
Deposit Machine

 You can deposit cash round the clock and throughout the year. A Cash Deposit
Machine is enabled to function 24X7, even on holidays. Thus, you dont need to
wait for the bank to open to deposit money.

Salient Features of Cash Deposit Machine

1. Accepts stacks of up to 200 mixed denomination notes
2. Quickly counts, validates, and denominates deposited currency
3. Displays deposit details on screen for customer verification

.39
4. Cash is held in secure area and returned if customer rejects transaction
5. Notes are deposited to specified cassettes
6. Itemized deposit details may be printed on customer receipt
7. Fake currencies are detected.

Advantages
1. Instant credit in CASA account.
2. Immediate receipt.
3. No need to fill cash deposit slips.
4. No need to stand in long queues.
5. No need to sort and arrange cash denomination wise.

.40

CHAPTER-2
DETAIL STUDY

System Overview

The project is designed to provide fully automatic cash deposit machine. The hardware
consists of LCD screen for displaying option to select the bank and enter Account No in
which cash is to be deposited and also guides the customer to next steps .The carriage is
provided to carry the currency notes one by one from customer where camera captures
image of every note and send the data image to PC with Matlab. Every data image of note
is compared with ideal stored image of every appropriate type of note. Every note is passed
through UV light to detect the originality of note which consequently results in acceptance
and rejection of faulty notes.

Figure1. Database contexts

Spindle is used to push notes from carriage to storage container of notes. Counter is
provided to count the cash and counted data will be sending to MC.

.41

CDM Provide Busy Customer Service

1.

Improved levels of convenience and security

2.

Improved speed of deposit and ease of use

3.

Reduced queuing time, increased customer satisfaction

4.

Unique receipt slip issued after each deposit made

5.

Revenue generating opportunities, created by re-deploying staff to more

profitable activities

6.

Flexibility to process cash at a convenient time or to outsource task

7.

Speed of transaction minimizes customer exposure to risk of attack

8.

Enhanced management information

.42
Customer Requirement
Banks customers taste and desire have begun to raise the stakes of expectation of exceptional
services. Customers want to transact their banking transactions at any time and location
convenient for their life-style. They want to pay their regular household bills. The four
forces - customers, technology, convergence and globalization have the most important
effect. The success of electronic banking, as agued by many researchers, depends probably
on bank service quality, customer preferences and satisfaction. Recent studies found that
consumer behavior is changing partly because of more spare time. The way of use of
financial services is characterized by individuality, mobility, independence of place and
time, and flexibility. Historically, banks have taken the attitude that they will provide
customers with the services and, the banks, wish to provide. In order to survive both from
domestic and the increasing level of global cross-border competition, banks need to change
their process of servicing their customers.

Benefit of automatic Banking

The perceived benefits of electronic banking have been documented in recent
studies, especially several electronic distribution channels available for banks in United
States and concluded that customer orientations towards convenience, service, technology,
change, knowledge about computing and the Internet affected the usage of different
channels. Convenience of conducting banking outside the branch official opening hours has
been found significant in cases of adoption. Banks provide customers convenient,

inexpensive access to the bank 24 hours a day and seven days a week. Literatures indicate
the movement away from cash transactions and in words of the use of non-cash payment has
continued to rise with increasing value. Tellers are today equipped to issue receipts (deposit
slips) for cash deposits the service of ordering bank draft of certified cheques made payable
to third parties has also been increasingly automated .

.43
reduction in the percentage of customers visiting banks with an increase in alternative
channels of distribution will also minimize the queues in the branches. Increased availability
and accessibility of more self-service distribution channels helps bank administration in
reducing the expensive branch network and its associate staff overheads. Bank employees
and office space that are released in this way may be used for some other profitable
ventures.

Customer always require fast technology

New technology has raised your customers expectations, and whilst they may come from
many different backgrounds, lifestyles and professions, your customers have one thing in
common: Choice of leisure time, work patterns, shopping, and the choice of how, when and
with whom they carry out their banking requirements. In this competitive environment the
winners are responding to their customers needs, and improving the banking experience
with
1.

A convenient customer service

2.

A modern retail environment

3.

Faster transactions and improved security

4.

Extended hours access to services Communications

Complete with a monitoring system to constantly verify operation and status of the CDM,

whether remotely or centrally located. A file transfer utility is also available for retrieving
audit and event history files. Automated Cash Deposits help you deliver more efficient
Self-Service solutions. Our range of Cash Deposit Machines has been designed either for
free standing or in the wall installation

.44

Unit-3
ANALYSIS OF DATA

1. Classification as per data collected in regards to Account In bank:

No. Of Depositor

Percentag
e

Saving Account

20

66.67

Current Account

13.33

Fixed Account

20

Recurring Account

Total

30

100

Bank Account

No. of Depositor as per Account

20

Saving Account

13.33
66.66

Fixed Account
Current Account

.45
2. Classification as per data
collected in regards to satisfaction
level of ATM service:
3. Classification as per data
collected in regards to check
that bank have enough ATM
machine in their area:

No. Of
Percentag
Satisfaction
Percentage
ATM
e
Level
Machine

Expected
Ans

Yes

21

70

No

11

30

Total

30

100

Expected
Ans

Yes
63.33
Satisfaction
Level19Of ATM Services
No

11

36.67

Total

30

100
Yes

30

No
70

ATM Machine in their Area

Yes
36.67
66.33

No

.46

4. Classification as per data

collected in regards to ATM they
always prefer while withdrawing
money:
ATM

No. Of
ATM
Machine

Percentage

Home Bank
ATM

20

66.67

Other Bank
ATM

10

33.33

Total

30

100

5. Classification as per data

collected in regards to procedure
they know if they forget the PIN:

Expected
Ans

People
Who
Percentage
Known The
Procedure

Yes

15

50

No

15

50

Total

30

100

ATM Machine Prefer While Withdrawing Money People Who Known The Procedure
Yes No

33% Atm Other Bank ATM

Home Bank
67%

50%

50%

.47
6. Classification as per data
collected in regards to procedure
they know if they have to change
the PIN:

7. Classification as per data

collected in regards to bank who
provide Cash Deposit machine:

Expected
Ans

No. of
Percentag
People
Bank
e
Who
Percentage
Providing
Known
The
CDM
Procedure

Yes

24

80

No

06

20

Total

30

100

Yes

25

83.33

No

05

16.67

Total

30

100

Expected
Ans

People Who Known The Procedure ATM Machine Prefer While Withdrawing Money
Yes No

Yes No

17%

20%
80%

83%

.48

8. Classification as per data

collected in regards to satisfaction
level of CDM service:

9. Classification as per data

collected in regards to Online
transaction the ATM user used:

Expected
Ans

Yes
No
Total

Person
Percentag
Satisfaction
Percentage
Who
Does
e
Level
Online
Transactio
23
n

76.67

07

23.33

30

100

Expected
Ans

Yes

10

33.33

No

20

66.67

Total

30

100

Satisfaction Level Of CDM Services

Yes

30

No
76.67

ATM Machine Prefer While Withdrawing Money

Yes No

33%
67%

.49

10. Classification as per data collected in regards to Awareness about other

service provided by ATM Machine:

Expected Ans

No. of People
Who Known

Percentage

Yes

26.67

No

22

73.33

Total

30

100

Person Who Known The Other Service

Provided By ATM Services

26.67
Yes
No
73.33

.50

Findings
1. (As per Table no.1), 66.67% Customers are having saving account, 13.33% customers
are having current account and 20%. Customers are having fixed account.
2. (As per Table no.2), 70% of customers are satisfied by ATM services while 30% of
customers are yet not satisfied.
3. (As per Table no.3), 63.33% customers think that they there are enough ATM machine in
their area while rest 36.67% of the customers doesnt think.
4. (As per Table no.4), 66.67% customers usually withdraw from their own bank ATM
while rest 33.33% customers used others bank ATM.
5. (As per Table no.5), 50% of the customers known the procedure about how to change
the pin if they forget the pin while other 50% of the customers dont know.
6. (As per Table no.6), 80% of the customers known the procedure to change the pin rest
20% of the customers dont know how to change the pin.
7. (As per Table no.7), 83.33% of bank provides Cash Deposit Machine while 16.67% of
bank yet doesnt providing Cash Deposit Machine. It means banks are still working on
CDM services and taking initiative to bring up the CDM service facility.
8. (As per Table no.8), 76.67% of customers find satisfied by CDM services while 23.33%
of the customers are not satisfied by CDM services.
9. (As per Table no.9), 33.33% of the customers used their ATM Cards for carrying out
their online transaction while rest 66.67% customers not used their debit card for online
transaction.
10. (As per Table no.10), 26.67% of the customers known that ATM machine also provide
other useful services like mini statement, mobile recharge facility, last 10 transaction, etc
while 73.33% yet dont know the services provided by ATM in regards to above services.

.51

Conclusion

 Ties multiple accounts to one ATM card and PIN combination

Allows a cardholder to have as many accounts as desired (more than one checking, more than
one credit card, more than one loan, etc.)
Includes all of the account types specified by the assignment checking, savings, loan,
mortgage, car or boat loan account and credit card account although we chose to create
vehicle loan as a loan account which encompasses car, boat, motorcycle, etc.
Allows cardholders to make balance inquiries, deposits, withdrawals, account payments, and
transfer funds all with the appropriate accounts displayed for selection depending upon the
type of transaction
Limits the amount of a withdrawal from an account to $200 with no limits placed on fund
transfers
Limits the number of transactions per day to 10
Provides cardholder with the option of a receipt.
Instant credit in your account.
Immediate receipt.
24/7 availability.
No need to fill deposit slip.
No need to stand in long clues.
No need to sort and arrange your cash denomination wise.
No extra charge on direct cash deposits.

.52

Annexure

QUESTIONNAIRE
(For Customer)
Name-____________________________________________
Age-______________________
GenderMale
Female
Educational Qualification-____________________________
Designation-_______________________________________
1. In Which Bank Do You Have Account?
______________________________________________
2. Which Type Of Account Do You Have?
Saving
Recurring
Fixed
Current
3. Are You Satisfied By ATM Services?
Yes
No
4. Does Your Bank Have Enough ATMs In Your Area?
Yes
No
5. Which ATM You Always Prefer While Withdrawing Money?
________________________________________________
6. What Is Maximum Cash Withdrawal Limit Per Day?
________________________________________________
7. Does Your Bank Levy Any Service Charge For Use Of Other
Banks ATM?
Yes
No
8. If Yes, Then How Much?
________________________________________________
.53
9. Do You Know The Procedure If You Forgot The Pin?
Yes
No
10.
Yes

Do You Know The Procedure TO Change The Pin?

No

11.
Machine?
Yes

Does Your Bank Provide Cash Deposit

No

12.

Are You Satisfied By The Services Of

Cash Deposit Machine?

Yes

No

13.

Do You

Use Debit Card For Online Transaction?

Yes
No
14.

Are You

Aware About Any Other Services Provided By ATM Machine?

Yes
No
15.

Any

Suggestion,
____________________________________________________

.54

Websites

 www.ijarcsms.com
http://www.atmmarketplace.com/whitepapers/5157/TheFuture-of-ATMs-Mobile-Security-and-Regulations-Oh-MyInfographic
http://en.wikipedia.org/wiki/atm
http://en.wikipedia.org/wiki/debit_card
www.articleblast.com A Brief Introduction to the
Automated Teller Machine.
www.rbi.org.in/scripts/NotificaticationUser
www.businessinsider.in
Blog.bankbazaar.com/new-rules-for-atm-usage
slideshare.com
www.ibef,org

.55