ICICI Bank, India’s largest private commercial bank, uses traditional automatic teller machines (ATMs) to deliver its financial services to the rich and the middle class, mostly in urban areas. ATMs are not, however, suitable for serving poor and low-income people in remote rural areas who are the majority of the 1 billion plus population. First, ATMs involve high capital and maintenance costs. Second, and more importantly, they use crisp notes of larger denominations and so cannot process the small denominations and worn notes that are the main currency in Indian villages.
With the help of the Indian Institute of Technology in Chennai and others, ICICI Bank built a user-friendly, market-compatible, low-cost village ATM from home-made parts and programming. The estimated cost is about $800. The machine can survive the extreme weather conditions and power outages that are common features of rural areas and uses fingerprint scanning to identify savers who are illiterate or who are reluctant or unable to use a personal identification number.
The rural ATM is being pilot-tested. Depending on the results, ICICI Bank expects to use it to mobilize savings and to provide deposit facilities to millions of poor families and, of course, to improve its bottom line.
Source: ICICI Bank; Bellman, E. 2004. Cashing in on the Masses. Far Eastern Economic Review. 8 July.