Chief general manager, Muthoot Finance in the back-of-the-beyond. In that case, where does it leave the cardholders if the ATM networkbuild-up slows down?
“The ATM network needs to be ramped up to 3,00,000 over the next three years so the masses can benefit from ease of accessing their accounts, cash and remittances,” says Patel ofTPSCL. Now given Mint Road’s insistence that WLATM rollout be 67 per cent in the semi-urban and rural with 23 per cent in urban catchments, it’s anybody’s guess how this math will be squared, especially for the many who already feel the pinch.
Here’s another set of numbers and you know what a qtficksand we are in. In 2013, Axis Bank, HDFC Bank and ICICI Bank added 4,133 ATMs. The SBI Group (SBI and its associate banks) put up 15,000. Punjab National Bank, Union Bank of India, and Bank of Baroda (BoB) together put up 5,000 ATMs. BoB alone added 2,800 to double its ATM network. So a total of24,133ATMs from these banks alone.
In 2014, the system as a whole added only30,855, and the lion’s share is that ofby non-WLATMs (banks).
It goes to prove that the WLATM policy has been turned
on its head. If you go by the strike rate set by the RBI (see The Asking Rate), WLATMs were to sprout all over the place.
In the veiy first year of operations (based on schemes that operators opted for), at least 1,000-25,000ATMs were to be added. So if there were five operators, there would have been between 5,000 and 125,000 ATMs in the debut year alone. Now, not all WLATMs opted for the same scheme, in which case, the cumulative WLATM deployment at just over 6,000 would have been fine. But that was not the case. And we now have a situation wherein TPSCL alone has 66 per cent share of this base!
Patel is of the view that the inter-change has to be a viable one. ‘Why were WLATMs licences issued? To bolster financial inclusion. We then have to be remunerated.” It will not happen soon. The National PaymentCorporation of India (NPCI) that decides on inter-change is split between net- issuers and net-acquirers.
What’s gone below the radar is the fall in inter-change fee over time and a cap on the number of free transactions has come to bite banks. The average ticket-size of ATM cash
withdrawals has inched up to Rs 4,200 (from Rs 4,000) as customers pull-out bigger amounts due to the cap on the number of firee-transactions per month. Again this average ticket-size is misleading; it is much higher in the metros. The result of all this: it now affects banks’ current and savings account deposits — the higher it is, the lower the cost of funds — as it fluctuates more due to higher withdrawals. In turn, it means that ATM’s have to be “fed” more cash (and at shorter intervals), which pushes up operating costs.
That’s another issue. The cost of funds for banks to feed their ATMs is at best at the prime-lending rate (it’s their own money in any case) and this holds true for brown-label ATMs too. In the case ofWLATMs, it is at PLR plus margin as it is in form of working capital. As for moving the cash to an ATM, it costs Rs9,000 a month (24X6; Sundays off). “In this, there is not much difference between banks and WLATMs,” says Aiyer ofWliter’s Safegaurd. Just that for WLATMs, since the bulk of deployments is in the hinterland, costs don’t justify the rollouts.
Bottomline: there’s no money in ATMs (for those in the business that is)! HQ
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chain Cinepolis. “We plan to scale up from 193 screens to 400 by 2017, with all of them on d-cinema systems.” Gautam Dutta, CEO of PVR, the country’s largest multiplex chain with 471 screens across 106 properties in 44 cities, concurs with this view. “All PVR cinemas run on d- cinema technology as we believe in providing a quality and premium movie-watching experience to our patrons,” he says. “Also, distribution of d- cinema is simpler, faster, cheaper and piracy can be better controlled.”
However, not everyone buys the latter argument. “Both d-cinema and e-cinema technologies are encrypted, so there is no question of piracy in e-cinema,” says Vineeta Dwivedi, CEO of KSS Digital Cinema, which has a network of300 e-cinema screens in India.
Tussle For Access
But the debate is not limited to discussing the superiority of one format over the other — it is a very real tussle, and can turn ugly too. In March, Mumbai-based KSS accused DCI-member studios of cartelisation, and demanded access to the dubbed versions of Hollywood films to cater to audiences in smaller centres. Through legal recourse and, later, by business arrangement, KSS secured the digital distribution rights of Furious 7, but failed to make a similar case for Avengers, for which the legal process is still on.
“The dubbed version of Furious 7was, perhaps, the first Hollywood film distributed by a DCI member that went
“As d-cinema is a superior
technology we don’t mind paying a
premium for it. We plan to scale up
from 193 to400screens by 2017
— all of them on d-cinema”
DEVANG SAMPAT, business head (strategy).Cinepolis 76 I BW I BUSINESSWORLD ! 15June2015
on our network of around 300 e-cinemas,” says KSS’s Dwivedi. ‘When Avengers was released in April, Disney declined us the rights for its dubbed version. It becomes difficult for us to explain to theatre owners and exhibitors why we can provide them one film and not the other.” Emails to DCI-member studios remained unanswered.
Who Will Prevail?
Will d-cinema surpass e-cinema one day? No, say cinema distribution companies UFO Moviez and Real Media Network, among the bigger players which operate in both formats. “India is a diverse market,” says Kapil Agarwal, joint MD of UFO Moviez, India’s largest digital film distribution company. “Back in 2005 when we started, the objective was to convert all analogue film theatres to digital screens. Now more than 7,200 digital screens are running on e-cinema. We are perhaps the only country that does not depend on Hollywood films for survival.”
Harsh Rohatgi, president (digital cinema) at Real Media puts a different slant on the matter. “DCI-imposed standards are benchmarks adopted by big Hollywood studios for exhibition of their films,” he says. “There is nothing wrong with that. The decision of a theatre or exhibitor to install a DCI-certified projection system is a business decision and one driven purely by returns on that investment.” Real Media has about 650 d-cinema theatres.
However, KSS and other smaller digital players are demanding access to at least dubbed Hollywood films till investments in d-cinema technology are made. What they cannot ignore is five years ago, d-cinema theatres commanded less than 5 per cent of the digital cinema universe; today, they have a 23 per cent share