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Automated Teller Machine

Last Updated 22nd Jan 2021
  • ATMs enable a user to withdraw cash, deposits, transfer funds, change ATM PIN or link Aadhaar to the bank account.
  • Banks offer ATM cards without any charge at the time of account opening.
  • It helps in paying utility bills and several other bills and payments.
  • ATMs are conveniently located at multiple locations.
  • The facility is available 24*7, 365 days a year.
  • It is safe and secure as the use of an ATM card is restricted only to the person who knows the PIN.
  • New ATM Rules from February 1 2021
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What is an ATM?

Automated Teller Machine is popularly known as ATM is an electronic device that enables customers of Banks and financial institutions to perform a variety of financial transactions, like as cash withdrawals, deposits, funds transfers, account information changing ATM PIN or linking Aadhaar to the bank account any time and without the need for interaction with bank staff.

History of ATM

Necessity is the mother of the invention, the concept of ATMs arose after out-of-hours cash distribution developed from bankers' needs in Japan, Sweden, the United Kingdom, and the United States. Japan, always touted as the leader in the tech revolution, invented the "Computer Loan Machine" which supplied cash. The device was operational in 1966.

After some slow progress and initial hiccups in the ATMs invention, Britain deployed the world’s first cash dispensing machine in London in 1967. The machine was put in use by Barclays Bank in Enfield Town, North London. The machine was invented by John Shepherd-Barron and the firm De La Rue. This was the pivotal point for modern ATMs.

History of ATM in India

The progress of ATMs in India was way slower. ATMs were introduced to the Indians in the early 1990s aided by foreign banks. As most of the banks were suffering from a serious handicap at that time due to lack of a strong branch network, ATMs appeared to be the best antidote for the problem.

The machine was introduced to eliminate the roadblocks of the branch networking by reaching out to the customers at a lower transaction cost and offering hassle-free services. Since then, innovations in ATM technology have come a long way and customer receptiveness has also increased by leaps and bounds.

How ATM Machine Works?

The use of an ATM machine is very easy. You can use following steps to use ATM machine:

Step 1: Visit the nearest ATM and insert your ATM card in the ATM.

Step 2: Choose your language from the options appearing on the display screen.

Step 3: Select the type of Transaction from transactions such as deposit, transfer, withdrawal of cash etc.

Step 4: Select the Type of Account from current, saving and salary accounts.

Step 5: Enter the withdrawal amount and four-digit ATM PIN.

Step 6: Collect the Cash

Step 7: Take a printed receipt.

Step 8: If you want to perform another transaction then select that option.

Types of Automated Teller Machine

There are different types of ATMs in India such as:

  • On-site ATM - ATMs which exist within the premises of the bank.
  • Off-site ATM - ATMs which operate outside the bank premises.
  • Worksite ATM - ATMs which are located within the premises of a company and is usually meant only for the employees of that company.
  • Cash Dispenser - ATMs which allows only cash withdrawals, balance enquiry and mini statement.
  • Mobile ATM - Mobile ATMs are those ATMs that move in areas for the users. COVID 19 has led to the surge in the number of Mobile ATMs.
  • White Label ATM - ATMs which are provided by Non-Banking financial companies.
  • Green Label ATM - Green ATMs are provided for Agricultural Transaction.
  • Orange Label ATM - ATMs which are provided for share transactions.
  • Yellow Label ATM - ATMs which are provided for online purchase.
  • Pink label ATM - ATMs which are provided for women.
  • Brown label ATM - Brown label ATMs are those ATMs where hardware and the lease of the ATM machine are owned by a service provider. However, cash management and connectivity to banking networks is offered by the sponsor bank

ATM Charges

Banks provide ATM cards without any charge at the time of opening of the bank account. However, banks charge for using the ATMs. There is no-cost for initial few transactions but after a cap level cost is charged in every additional transaction. The charges of the top banks are as follow:

Bank Per month Free Transactions Cost after free Transactions
SBI 5 transactions at SBI ATMs and 3 at Other ATMs ₹ 25 per transaction
ICICI Bank Free transaction at all ICICI ATMs ₹ 25 per transaction at all non-ICICI ATMs
HDFC Bank First 4 transactions ₹ 150 per transaction

Features of Modern ATM

ATMs have been changing over time and the machine’s technology is becoming more sophisticated to provide the best experience to the user and make the transactions safer and secure. Some of the vital changes are:

  • Multipurpose nature of ATMs: Unlike in the past, ATMs are not merely providing the facility of dispensing cash but today they provide facilities of depositing the cash, fund transfer, payments of bills and generating mini statements. These are just a few services, there are many other sophisticated services provided by the banks.
  • Easy to use: The modern ATMs are designed in such a way that it becomes easier to use for everyone including illiterate individuals and specially-abled person. The technology like biometric identification scanners makes it convenient to use for almost everyone.
  • No language barrier: India is a country with infinite culture and language and thus use of one language in operating ATMs becoming the roadblock for many users. Multilingual or use of many languages in the ATMs acts as an antidote to this problem. Modern ATMs are equipped with multiple languages and the user can choose the language of his choice which makes it easier for him to use the machine.

Benefits of ATM Card Use

Benefits of ATM card are as follows:

  • ATMs are conveniently located at multiple locations. Customers visit the ATM of any bank to perform any transaction.
  • It helps in withdrawing the cash in a matter of minutes and thus saves time.
  • The process of getting an ATM card is hassle-free and no documentation is required for an ATM card. Almost all banks provide ATM cards at the time of account opening.
  • Helps in getting the details of the transactions, total balance and mini statement.
  • Some ATMs also provide the facility of depositing cash and fund transfer.
  • Helps in paying utility bills and several other bills and payments.
  • The facility is available 24*7, 365 days a year.
  • ATM is safe and secure as the use of an ATM is restricted only to the person who knows the PIN. Thus if the customers keep the PIN confidential then no one other than the customer can use the ATM.
  • ATMs are self-service and thus reduces the workload of the Bank staff.
  • ATM reduces the requirement for carrying cash as individuals can withdraw at any ATMs which acts as a cashpoint.

  • PNB announces safety measures to safeguard customers
    On January 14, 2021, Punjab National Bank has announced new ATM rules which are applicable from February 1 2021. As per these rules, account-holders will not be able to carry both financial & non-financial transactions through Non-EVM ATMs. Non-EMV ATMs are those ATMs that do not hold the card during the transaction. The Bank says that the decision has been taken to safeguard the customers from fraudulent activities.


How can I generate my ATM PIN ?

You can generate your ATM PIN by visiting the nearest ATM, sending an SMS, calling the customer care or by internet banking.

How can I change my ATM PIN online?

Customers are also provided with an option to change the ATM PIN. They can change the PIN by multiple ways like visiting the nearest ATM, sending an SMS, calling the customer care or by internet banking.

Can I generate ATM PIN online?

Yes, customers are also provided with an option to change the ATM PIN online by internet banking.

How can I generate my ATM PIN by mobile?

You can generate the PIN using the mobile by either sending the SMS or by calling the customer care. You can also use your net banking or mobile app to generate ATM PIN.

What is the ATM PIN?

Personal Identification Number (PIN) is a 4-digit number which allows you to access your account information and perform other activities using an ATM.

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