India’s Union Bank May Outsource Its ATM Maintenance

Union Bank of India Ltd. has released a request of proposal for the outsourcing of installation and maintenance of 1,000 ATMs.

In the March 8 proposal request obtained by PaymentsSource, the Mumbai-based bank is seeking a service provider to install and maintain the machines on a per-transaction basis. The bank will accept proposals through March 31.

The chosen qualified service provider would set up the ATMs in nine areas of the country, including Mumbai, Delhi, Lucknow and Bhopal, according to the bank’s rollout plan.

The service provider’s duties would include site preparation, ATM procurement and installation, and cash forecasting and replenishment.

Applying service providers would need to have experience installing and maintaining at least 500 ATMs for a minimum of one year and for a minimum of two banks in India, according to the bank’s requirements.

To apply for the contract, the provider would need to be a registered company in India. Also, the provider, or its parent, would need to earn annual revenue that exceeds 1 billion rupees (US$ 22.2 million or 15.9 million rupees) and be profitable for the past two years.

At the end of last year, Union Bank operated 2,516 ATMs. The bank issues only Visa-branded debit and credit cards.

Banks in India have been outsourcing their ATM networks in a trend that gained momentum in 2009 following a directive from the central bank to stop charging even noncustomers for cash withdrawals (see story).

Since then, State Bank of India Ltd. has inked similar ATM-outsourcing deals with multiple vendors, and Yes Bank Ltd. inked such a deal with First Data Corp. (see story).

Last May, Mumbai-based Axis Bank Ltd. entered into separate deals with two third-party service providers for the setting up and management of more than 5,000 ATMs (see story).