Page 38 - Banking Finance April 2019

ARTICLE

Continued from last issue

A STUDY ON

'THIRD COST'

IN BANKS

(Rent, Taxes and Lighting)
(Schedule 16 - Operating Expenses

of Banks' Balance Sheet)

ATM-cum-CDM, pass book printer and scanning machines, it can yield good results in long run.
While selecting the places for providing these systems like
cheque scanning machines for collection cash deposit machines, pass book printers and cheque
Rush or pressure at the branches can be reduced by scanning machines for collection, the banks should survey
introduction of CDMs, pass book printers and cheque before installing these systems otherwise incurring of
scanning machines in ATM premises of important strategic additional capital expenditure is a burden to the bank
locations of metro, urban and semi-urban centres. Thereby instead of benefit at regular intervals.
further reduction of foot falls of the customers at bank
branches and optimum utilization of ATM room spaces is Close / Shift low hits ATM premises
possible. This strategy not only saves the rent and electricity
At initial stages most of the banks have installed number of
costs of the ATM spaces but also the branch space can be
trimmed to some extent. ATMs at different locations as a new initiative. For every
location banks are incurring overheads like rent for the ATM
Room, security staff, capital expenditure for interior
This strategy gives more benefits to the bank even though
at initial stages banks may incur additional capital decoration and also air-condition system and depreciation
thereon, cash replenishment on monthly basis etc. Shifting
expenditure for CDMs, Pass Book Printers and cheque
of ATM to strategic location is one strategy to reduce the
cost of operations of the bank.
About the author
While shifting the ATMs, the bank should study the factors
Er. Sunil Dasari like Number of hits of the ATM (own customers vs. other
Senior Manager - Faculty bank customers usage), number of complaints received,
Union Bank of India down time period (number of hours / days) in a month, cost-
Staff Training Centre benefit-analysis of the ATM, locational advantages, strategic
Bhopal
points / locations for shifting of ATMs etc. are to be studied

38 | 2019 | APRIL | BANKING FINANCE