ATM frauds in India

ATM has now become the most used touch point between a bank and its consumers. More people are now moving towards using the ATM for their banking needs. Increased ATM usage is also helped by the fact that customers have now the flexibility of using ATMs of other banks, as most of the banks are part of major interbank networks like CashTree, Cashnet and BANCS. Number of ATMs installed in India grew by almost 20%, from 17,642 in March 2005, to more than 21,000 by March 2006. Yet, the ATM market in India is not saturated. Though the concentration of ATMs is greater in metros, the demand is increasing for other cities and even rural areas. Many ATM vendors have devised specialised machines, embedded with biometric devices for authentication. Catering to the rural population, these machines have enabled them to interact with the machine in their local language and on a graphical user interface. The rural customer has seemed to accept this new medium. This has the potential to further widen the scope of ATM usage in the interior parts of the country. There is also interest towards white-label ATMs. Many companies are interested in this model, where the ownership of the ATM will not be with the banks but with third parties who deploy them and make money on fees charged on every transaction. Most ATM frauds happen due to the negligence of customers in using the ATM. The number of ATM frauds in India is more due to giving up Personal Identification Number (PIN) to others, than by sophisticated crimes like skimming. There are many cases where customers give out their PIN number to their driver or a relative to withdraw money for them. Most ATM frauds in India, thus, happen due to this negligence, and not ‘fraud’ per se.