Atm Dilemma

By Marketing Research Team, 3EA
Atm Dilemma

In October 2001, Senior Branch Manager of Ascent Bank, announced at an Annual Customers Meet, that the branch was studying the possibility of establishing and ATM in the defence campus to cater to the requirements of the increasing sophisticated high profile customers and also the demand posed by the defence authorities, where the branch existed and had been operating successfully for past few years. Accordingly, a proposal to set up the ATM was made and sent to H.O for approval.

Situated in the secured defence are, just half a kilometre from the National Highway, (NH-8) the bank had established its branch in early 1980's basically to cater the defence personnel and slowly expanded its operations and captured the local business market/needs and as well as penetrated the surrounding villages within the radius of 10Km to 15Km by 2000.

Government of India (GOI) had declared that by 2005, NH-8 would form the part of National Golden Quadrangle, which the National Highway Authority of India had undertaken for development to augment the country for better economic growth and prosperity.

The senior branch manager had envisaged the future business opportunity and the need that would be arising due to increase in traffic density and population using the said NH-8 road would go manifold times. Thus the proposal to set up ATM with estimated cost had been sent to the HEAD Office (H.O) with the details. (Annexure 1)

However, the H.O remained silent with respect to this proposal till late 2002. In Feb 2003 the branch manager was transferred and the new branch manager took charge on 1st Mar 2003.

The branch received a letter from the defence administration that in spited of repeated requests to set up the ATM in the campus which had been the requirements of the personnel posted and in view of various other public sector banks as well as foreign and private players ready to provide the same the branch must either set up ATM at the earliest or move out of the premises.

When the senior branch manager called for the files he saw the proposal sent to H.O. in early 2002. He was totally confused and taken aback. Meanwhile, highway work commenced in full swing, and a part of it was nearly completed. Moreover, competing banks had already set up two new ATM's one being Global ATM within a distance of 5 Km.

When H.O received all these information including a copy of the earlier proposal sent, it was a rude awakening to the possibility of not only losing premises and good established business but also the location advantage and future business opportunity due to changed environment for the branch as well as the changing scenario of banking services vis-Ã -vis customers' expectations. The last thought at the H.O meeting which approved setting up Global ATM, was Managing customers' expectations may mean profitable business's in the present scenario.

Annexure 1

  • More than 100 big farmhouses and 2 big villages namely, Kapashera and Samalka surround the branch. A huge high profile residential area has also been developed with apartments, penthouses where no banking facility or ATM exists.
  • As of date the branch is having around 5000 account holders and the moment the ATM is installed the number of account holders is likely to be doubled. The bank has locker facilities, loans to women entrepreneurs and group corporate borrowings.
  • In terms of business the present figure is around 20 crores. With the installation of ATM the business would cross a figure of 60 crores within six months.
  • The cost of installing a global ATM is Rs.25 lakhs approximately. Other incidental expenditure like construction, cabling etc. would not be more than Rs. 5 lakhs.
  • The branch is fully computerized and equipped with all modern and latest banking facilities.

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Case Study by: Marketing Research Team, 3EA