An ATM, short for Automated Teller Machine, is an electronic device designed for dispensing and accepting cash. These machines are installed to provide bank customers with access to their funds at any time, regardless of the bank’s operating hours. It operates as a self-service counter that is open 24 hours a day, 365 days a year. To utilize the ATM, customers must maintain a minimum balance and adhere to a maximum withdrawal limit.
Customers are issued an ATM card, which comes with a Personal Identification Number (PIN) known only to the cardholder. To withdraw cash, the customer inserts their card into the machine. The ATM verifies the card’s authenticity, and the door opens automatically. Then, the customer enters their PIN using the keypad, and the requested amount of cash is dispensed. ATMs also offer the convenience of accepting both checks and cash deposits. These machines can be found in various locations such as shopping centers, airports, railway stations, or within bank premises. It’s important to note that ATMs require currency notes that are not folded and can smoothly pass through the machine, and they typically dispense specific denominations of currency.
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In the realm of automated teller machine (ATM) services, several key aspects warrant consideration:
a) ATM Machine: The ATM serves as an extension of the bank’s computer system, allowing customers to independently conduct a variety of transactions, including cash withdrawals, deposits, balance inquiries, fund transfers, and access to account statements, all available around the clock.
b) Video Screen: Each ATM terminal features an integrated video screen. Additionally, it is equipped with a cash dispenser that releases currency notes based on instructions from the bank’s computer system.
c) ATM Card: Customers are provided with an AT. card, complete with Magnetic Ink Character Recognition (MICR) coding, enabling the computer to identify the customer. Furthermore, customers receive a confidential Personal Identification Number (PIN). By inserting the card into the AT. slot and entering their identification number, customers can operate the computer.
d) PIN: The PIN is generated by the computer during account setup, and even bank personnel do not have knowledge of this number.
e) Withdrawal Terms and Conditions: The AT. card outlines the terms and conditions for operation, specifying maximum withdrawal limits per transaction and per day, as well as the required minimum balance. In comparison to credit cards, an AT. card functions as a debit card.
Advantages of ATM Services
The benefits of automated teller machine (ATM) services encompass the following:
a) 24-Hour Availability: ATM services are accessible 24 hours a day, seven days a week.
b) Convenient Locations: AT. can be situated in convenient off-branch locations, including shops, factories, and offices.
c) Privacy and Self-Service: AT. assure the privacy of financial transactions through self-service capabilities.
d) No Need for RBI’s Approval: Banks can install AT. in their branches or extension counters without the need to obtain permission from the Reserve Bank of India (RBI).
e) Flexible Transaction Timing: AT. users can conduct transactions while commuting to and from work, during shopping trips, or on holidays, with the choice of timing being unlimited.
f) Efficiency and Speed: AT. offer quick and efficient services. The machine operates professionally, guiding customers through their transactions in straightforward steps, minimizing time wastage.
g) Standardized Customer Response: AT responses to customers are standardized, with transactions proceeding according to programmed and logical steps. Moreover, transactions are required to be completed within a specific timeframe. Failure to respond within the set time results in the transaction being aborted, with this time limit pre-determined by the bank.
Limitations of ATM Services
AT services have their constraints, which include:
a) Withdrawal Limits: Large cash withdrawals are restricted and subject to predetermined limits based on the customer’s card.
b) Cash Dispensation Restrictions: AT primarily disburse currency in specific denominations. Consequently, cash withdrawals must align with these predefined multiples.
c) Limited Functionalities: AT are equipped to perform only a limited range of banking functions. Customers must visit the bank in person or explore alternative methods for activities such as credit limits or locker facilities, which fall beyond the AT’s capabilities.
ATM stands for Automated Teller Machine.
ATMs work by connecting to the bank’s computer network. When a user inserts their card and enters a PIN, the ATM communicates with the bank to verify the account and process transactions.
ATMs offer various services, including cash withdrawals, balance inquiries, fund transfers, and sometimes bill payments.
In most cases, you can use ATMs that belong to your bank’s network without incurring additional charges. Using ATMs from other banks may involve fees.