IDRBT waives NFS Switching Charges to promote ATM usage in the country
December 03, 2007

The advent of Automated Teller Machine (ATM) in India in the 90s helped the customers to draw cash from their accounts round the clock from convenient and easily accessible locations. The National Financial Switch (NFS) set up by the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad promoted by the Reserve Bank, has provided the facility of interconnectivity of ATMs for customers to use any ATM for cash withdrawal and for other transactions like balance enquiry etc.

The NFS network now covers 16,891 ATMs and it is the largest single network in the country covering ATMs of 27 banks, a list of which is available in the IDRBT website [www.idrbt.ac.in].The daily average transaction volume of the NFS network is around 75,000.

The NFS is an apex level switch which aims to integrate all the ATM switches of banks in the country so as to provide the flexibility of making transactions across all connected ATMs. Since NFS picks up the transaction only from switches and not from individual ATMs, NFS can act as a "mother of all switches" and at the same time being equidistant from competing banks and competing networks. Thus NFS facilitates better resource utilization and enables common man to utilize the ATM of any bank rather than restricting himself/herself to only his/her bank. NFS can also act as an aggregator of transactions for a bank.

IDRBT presently charges Rs. 2/- for providing this facility of switching (routing) the transactions of various member banks.

With a view to encouraging all banks to join NFS network for widening the coverage of ATMs and thereby providing easier access to customers as also to promote greater use of ATM as an important payment system infrastructure, the IDRBT has decided to waive off the switching fee of Rs. 2/- with effect from December 3, 2007

It is hoped that this will promote use of ATM as shared infrastructure of all banks benefiting all customers and taking the technology to the common man thereby contributing to a techno-banking culture all over the country. This opens up an opportunity for banks to reduce costs by routing inter-bank ATM transactions through NFS.