National Financial Switch
|Founded||27 August 2004|
National Financial Switch (NFS) is the largest network of shared automated teller machines (ATMs) in India. It was designed, developed and deployed by the Institute for Development and Research in Banking Technology (IDRBT) in 2004, with the goal of inter-connecting the ATMs in the country and facilitating convenience banking for the average Indian. It is run by the National Payments Corporation of India (NPCI).
The first ATM in India was set up in 1987 by the The Hongkong and Shanghai Banking Corporation in Mumbai. In the following twelve years, about 1500 ATMs were set up in India. In 1997, the Indian Banks' Association (IBA) set up Swadhan, the first network of shared ATMs in India. It was managed by India Switch Company (ISC) for five years, and allowed cardholders to withdraw cash from any ATM in the network, for a fee if they did not have an account with the bank that owned the ATM. In 2002, the network connected over 1000 ATMs of the 53 member banks of the association. The network was capable of handling 250,000 transactions per day, but only 5000 transactions, worth about 100,000, took place each day. In contrast, ICICI Bank's network of about 640 ATMs handled transactions worth about 20,000,000 each day. After the contract with ISC expired, IBA failed to find a bidder to manage the operationally uneconomical network, and shut it down on 31 December 2003.
After the collapse of Swadhan, Bank of India, Union Bank of India, Indian Bank, United Bank of India and Syndicate Bank formed an ATM-sharing network called CashTree. Citibank, the Industrial Development Bank of India, Standard Chartered Bank and UTI Bank formed a similar network called Cashnet. Punjab National Bank and Canara Bank also created such networks.
In August 2003, the IDRBT announced that it would be creating the National Financial Switch (NFS) to link together the country's ATMs in a single network.
The IDRBT collaborated with Euronet Worldwide and Opus Software to build a platform to allow banks to connect their own switches to the NFS. The NFS consisted of an inter-ATM switch and a e-commerce payment gateway.
The National Financial Switch was launched by the IDRBT on 27 August 2004, connecting the ATMs of three banks, Corporation Bank, Bank of Baroda and ICICI Bank. The IDRBT then worked towards bringing all major banks in India on board and by December 2009, the network had grown to connect 49,880 ATMs of 37 banks, thereby emerging as the largest network of shared ATMs in the country.
IDRBT decided to hive off its operational role on ATM switching to refocus on research and development, and was sought to shift the business to a national-level payment system organization. The National Payments Corporation of India (NPCI) started discussions with IDRBT on the feasibility of taking over. The Board for Regulation and Supervision of Payment and Settlement Systems (BPSS) at its meeting held on 24 September 2009 approved in-principle to issue authorisation to NPCI for operating various retail payment systems in the country. The Reserve Bank of India granted authorisation to NPCI to take over the operations of National Financial Switch (NFS) from the Institute of Development and Research in Banking Technology (IDRBT) on a ‘as is where is basis’ on 15 October 2009. NPCI deputed its officials to IDRBT Hyderabad, and the Institute handed over the National Financial Switch to the NPCI on 14 December 2009.
Any bank that provides core banking services with 24x7 transaction banking capabilities with or without ATMs may join the National Financial Switch through a sponsor bank. This allows non-scheduled Urban Co-operative Banks (UCBs) and Regional Rural Banks (RRBs) to gain access to the national network of over 103,000 ATMs in the country. Before 14 August 2011, access was limited to scheduled banks with RTGS membership. The sponsorship scheme was started to increase the connectivity of ATMs across the country, and to enable customers to use ATMs across India.
As of May 2014, the NFS Network connects 1,66,928 ATMs of 78 member banks, 164 sub-member banks, 47 RRB member banks and 4 white-label ATM providers, which is the largest number of ATMs under a single network in India. Bhartiya Mahila Bank has joined the National Financial Switch ATM network as the 83rd member by issuing RuPa's chip based debit cards.
- NFS Member Banks ATMs
|Bank||Number of ATMs|
|Abhyudaya Co-operative Bank||109|
|APNA Sahakari Bank ltd||44|
|Bank of Bahrain and Kuwait||3|
|Bank of Baroda||6,514|
|Bank Of India||4,784|
|Bank of Maharashtra||1827|
|Bassein Catholic Co-operative Bank Ltd||30|
|Catholic Syrian Bank||231|
|Central Bank of India||3,683|
|City Union Bank||941|
|Development Bank of Singapore||35|
|Development Credit Bank||232|
|Dombivli Nagarik Sahakari Bank||33|
|First Rand Bank Ltd||7|
|Gopinath Patil Parsik Janata Sahakari Bank Ltd||32|
|Indian Overseas Bank||2,149|
|ING Vysya Bank||618|
|Jammu and Kashmir Bank||726|
|JanaKalyan Sahakari Bank||16|
|Janata Sahakari Bank||33|
|Kallappanna Awade Ichalkaranji Janata Sahkari Bank||24|
|Kalyan Janata Sahakari Bank||30|
|Karur Vysya Bank||1,468|
|Kotak Mahindra Bank||1,004|
|Lakshmi Vilas Bank||688|
|Mahanagar Co-operative Bank||35|
|Mehsana Urban Co-operative Bank||13|
|NKGSB Co-operative Bank||76|
|Nutan Nagarik Sahakari Bank||2|
|Oriental Bank of Commerce||1,697|
|Punjab and Maharashtra Co-operative Bank||92|
|Punjab and Sind Bank||388|
|Punjab National Bank||6,577|
|Saraswat Co-operative Bank||183|
|Shamrao Vithal Bank||147|
|Standard Chartered Bank||279|
|State Bank of India||38,779|
|Tamilnaad Mercantile Bank||542|
|Thane Janata Sahakari Bank||92|
|The A.P. Mahesh Co-operative Urban Bank Ltd||4|
|The Bharat Co-operative Bank ltd.||49|
|The Greater Bombay Co-operative Bank||21|
|The Kalupur Commercial Co-Op Bank Ltd||36|
|The Karad Urban Co-operative Bank ltd||21|
|The Municipal Co-operative Bank Ltd||4|
|The Ratnakar Bank Ltd||243|
|The South Indian Bank||878|
|The Surat People’s Co-operative Bank Ltd||15|
|The West Bengal State Co-operative Bank Ltd||5|
|Union Bank Of India||5,337|
|United Bank of India||1,086|
|Yes Bank Ltd||1,122|
- NFS Total ATM Coverage
|Member type||No of banks||No of ATMs|
|RRB member banks||47||82|
|White-label ATM providers||4||2239|
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- "Euronet Worldwide selected as turnkey solution provider for India’s national financial switch". Leawood: Euronet Worldwide. 2004-05-20. Archived from the original on 2014-05-01. Retrieved 2014-05-01.
- "Banks switch to interconnectivity". Economic Times (Mumbai: The Times Group). Press Trust of India. 2004-06-23. Archived from the original on 2014-04-29. Retrieved 2004-08-31.
- "Any bank can now join national financial switch: NPCI". Economic Times (Mumbai: The Times Group). Press Trust of India. 2011-08-14. Archived from the original on 2014-04-29. Retrieved 2014-05-01.
- "NFS Member Banks ATMs". National Payments Corporation of India. Archived from the original on 2014-02-08. Retrieved 2014-05-01.