Functions of ATM In Banking.The primary and basic functions of commercial banks were the acceptance of deposits from people and advancing them to needy ones. With the passage of time the banks started many other agency and utility functions in addition to their basic functions to facilitate the customers in various fields of life.
Functions of ATM In Banking
An automated teller machine (Old name Mechanical Cash Dispenser – 1939) is one of the modem services provided by the banks from where an account holder can withdraw money from the account at any time (24 hrs) from any branch of the particular bank.
Due to this facility, the people do not need to keep huge amounts in homes or pockets or offices. The first successful ATM deployment in the world came about when Barclays Bank introduced the ATM in 1967. Today, ATMs are popular dubbed “Any Time Money” in a number of markets in the world.
DEFINITION:
“It is an unattended computer terminal that performs basic Teller functions when a card holder inserts a card into A.T.M (Auto Mated Teller Machine) and enters the correct pin code on 24 hour basis.”
HOW DOES ATM WORK?
An ATM is simply a data terminal with two input and four output devices. Like any other data terminal, the ATM has to connect to, and communicate through, a host processor. The host processor is analogous to an Internet service provider (ISP) in that it is the gateway through which all the various ATM networks become available to the cardholder (the person wanting the cash).
Most host processors can support either leased-line or dial-up machine. Leased line machines connect directly to the host processor through a four-wire, point-to-point, dedicated telephone the. Dial-up- ATMs connect to the host processor (through a normal phone line using a modem and a toll-free number, or through an Internet service provider using a local access number dialed by modem.
Leased-line ATMs are preferred for very high-volume locations because of their thru-put capacity, and dial-up ATMs are preferred for retail merchant locations where cost is a greater factor than thru-put. The initial cost for a dial-up machine is less then half that for a leased-line machine. The monthly operating costs for dial-up are only a fraction of the costs for leased-line.
The host processor may be owned by a bank or financial institution, or a may be owned by an independent service provider. Bank- owned processors normally support only bank owned machines, whereas the independent processors support merchant-owned machines.
ATM Card:
A card used to withdraw money from automated teller machine is called ATM card. A person having sufficient amount in bank account can only use this card. A specific number is printed on every ATM card lh< cardholder is also allotted a pin code to use ATM card. Only the cardholder knows the allotted pin code. The customer has to enter pin code after inserting the card in ATM to withdraw money. The customer can draw money only up to a certain limit from ATM at one time.
Withdrawal Through ATM:
The following steps are required to withdraw money from an ATM
- ATM card is inserted in specified part of the machine.
- Pin code is entered when a message appears on the screen on machine.
- After this, the customer selects an account from different accounts appeared on screen.
- To withdraw the required amount, the customer selects one amount from the different amounts appeared on screen.
- The machine will send the card out from a specified part after completing a particular process.
- When the customer gets his card from specified part, the required amount comes out from another specified part immediately.
10 Universal Functions of ATM In Banking
- Easy Use:
The use of ATM is very easy and even an illiterate person can easily withdraw the money through ATM.
- Round the Clock Facility:
The amount can be withdrawn from bank account not only during banking hours but also after banking hours.
- From any Bank of Branch:
The customer keeping in view his own convenience can withdraw money from the ATM of his bank and its branches but also from any other bank.
- Time Saving:
The customer spends very less time to withdraw money from ATM because he does not need to write any cheque and wait for his turn.
- (v) Mini Statement:
The customer can check his balance with bank through ATM. Moreover, he can also obtain mini statement to collate his previous transactions.
Automated Teller Machines (ATMs) are a crucial component of modern banking systems, providing convenience and accessibility to customers. Some of the functions of ATMs in banking include:
- Cash Withdrawals: The primary function of ATMs is to dispense cash to customers. Customers can withdraw cash from their bank accounts using their debit cards, providing them with immediate access to their funds.
- Deposits: Many ATMs also allow customers to deposit cash or checks into their bank accounts. This function can be especially useful for customers who do not live near a physical bank branch or need to deposit funds outside of regular banking hours.
- Account Information: ATMs allow customers to check their account balances, review recent transactions, and print mini-statements. This function provides customers with up-to-date information on their account activity and can help them make informed financial decisions.
- Funds Transfers: Some ATMs also allow customers to transfer funds between their accounts or to other accounts within the same bank. This feature can be useful for customers who need to move money between accounts quickly or for paying bills.
- Bill Payments: Many ATMs allow customers to pay bills directly from their accounts, providing them with a convenient way to manage their finances.
- PIN Changes: Customers can change their ATM PINs using the machines, ensuring the security of their accounts.
- Foreign Currency Exchange: In some locations, ATMs allow customers to exchange their currency for foreign currency. This feature can be especially useful for customers traveling abroad.
Overall, ATMs play a critical role in modern banking, providing customers with access to their funds and account information around the clock, and making banking more convenient and accessible.
