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Interbank Networks in India

An interbank network, also known as an ATM consortium or ATM network, is a network that connects the ATMs of different banks and permits these ATMs to interact with the ATM cards of other banks within a given network.

Interbank ATM network is a network of ATMs wherein a cardholder of any of the participating bank can carry out specified transaction at any of the ATMs connected to the network. In the coming years, the cost of investments on ATM terminals will be on the rise, and at the same time, transaction volumes per ATM will fall with an increasing numbers of ATMs. Thus the best option for banks today, is to share the service and infrastructure for a small fee. In 1997 an attempt was made in this direction with Indian Banks’ Association’s (IBA) Swadhan network.



While interbank networks provide capabilities for all ATM cards within the same network to use other banks' ATMs that belong to the same network, the services vary. Usually, when a person uses their ATM card at an ATM that does not belong to their bank, the basic services, such as balance inquiries and withdrawals, are usually available. However, special services, such as the top-up of mobile phone talk time, are usually not accessible to ATM cardholders of banks other than the ATM cardholders of the acquirer (the bank that owns the ATM). Currently, there are five major interbank ATM networks operating in India & National Financial Switch, BANCS, Cashtree, Cashnet and Mitr.

From first day of April 2009, entire ATM network is now available to customers from any bank for transactions for no fee at all, irrespective of the banks in which they have their accounts, Now Customers will not be levied any fee on cash withdrawals using ATM and debit cards issued by other banks. This will in turn increase usage of ATMs in India.

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