ATM installations : How To Apply For It
These days, the majority of owners of commercial real estate choose to rent their properties to banks and non-banking financial companies (NBFC) in order to avoid the hassles of renting. In Commercial Real Estate (CRE), renting out commercial space to banks and NBFCs for the installation of Automated Teller Machines (ATMs) has grown in popularity. In Tier-2 cities where you rent your space for an ATM, as well as in major cities like Hyderabad, Bangalore, and Chennai, it is quickly catching up.
What is the ATM installation process?
The following is a list of general requirements for applying for an ATM on commercial premises. To learn more about the procedure, nevertheless, one can also get in touch with a registered broker or real estate agent:
- Make an application for the installation of an ATM at a bank or NBFC.
- The application must contain all relevant information about the property, including its location, size, and any surrounding landmarks.
- After reviewing the proposal and assessing the area’s demand and foot traffic, the institution will process the application as appropriate. Banks typically favour freehold properties free of mortgages or other encumbrances.
- After the application is approved, the candidate must supply the necessary information in the format that is standard.
- In addition to providing space for an ATM installation, the landlord must set up a server room and make arrangements for network connectivity when renting out the space.
- A lease for the property will be signed by the institution and the landlord.
- Banks charge between Rs 60 and Rs 200 per square foot for rent. That being said, this could change depending on the going market rates, the location of the ATM (rural vs. urban), and the volume of possible transactions each day.
What are the ATM leasing models?
There are three types of ATM leasing models: White-Label ATM, Brown-Label ATM, and Franchise ATM.
White-Label ATM
There are no banks that own White Label ATMs. They belong to the NBFCs. White-label ATMs were made possible in 2011 by the Reserve Bank of India (RBI) for non-banking Indian firms that were formed under the Companies Act. These non-banking businesses confirm the ATMs’ cash flow by signing a “Service Level Agreement” with a network provider and sponsor bank. The RBI has directed the NBFCs to open a specific number of ATMs in a predetermined amount of time. Additionally, the majority of these ATM installations are located in rural areas, with semi-urban and metropolitan areas following suit. For example, the installation of 15,000 ATMs by the Tata Communications Payment Solutions Limited (TCPSL) is mandated, with 10,000 of those ATMs to be placed in rural areas and 5,000 in urban areas.
Brown-Label ATM
The idea behind brown label ATM is to split the costs or contract out the ATM’s operations to a different company. The ATM hardware is owned by the service provider; however, the sponsor bank handles cash management and network connectivity. The sponsor bank’s logo is shown on the ATM. It is a financially sensible option for banks.
Franchise ATM
Another way for using your commercial space is by obtaining an ATM franchise. Tata Communications Payment Solutions Ltd (TCPSL) has launched this model, in alliance with Franchise India. Nonetheless, in the case of Franchise ATMs, areas with high popularity and footfall are more preferred.
Some other ATM Leasing Models
Apart from White Label, Brown Label and Franchise models, ATMs are also divided into several other categories according to their labels. Check out the following table to learn a few of these labels:
| Different categories of ATMs | |
| Type | Usage Purpose |
| Green Label ATMs | These ATMs are used for agricultural purposes |
| Orange Label ATMs | Share transactions are the key purpose of Orange Label ATMs |
| Pink Label ATMs | The main objective of Pink Label ATMs is to help females escape long-standing queues and higher waiting times |
| Yellow Label ATMs | Yellow Label ATMs are primarily used for E-commerce transactions |
Rural Area
- SPACE REQUIRED 50 TO 80 SQ FIT
- MINIMUM RENT PER MONTH RS – 8,000
- MINIMUM AGREEMENT PERIOD 05 YEARS
- TRANSACTION COMMISSION 0.5%
- JOB FOR 1 PERSON AS A SECURITY GUARD ( SALARY 9K PER MONTH )
Urban/Semi Urban Area
- SPACE REQUIRED 50 TO 80 SQ FIT.
- MINIMUM RENT PER MONTH RS – 14,000
- MINIMUM AGREEMENT PERIOD 05 YEARS
- TRANSACTION COMMISSION 0.5%
- JOB FOR 1 PERSON AS A SECURITY GUARD ( SALARY 12K PER MONTH )
Top 10 ATM Installation Companies in India
Leasing a property to a bank is convenient; however, choosing which bank is an ideal lessee can be complicated. Since choosing the right option is crucial, here’s a list of the top 10 ATM installation companies in India that hold a significant reputation in the market-
- HDFC Bank
- ICICI Bank
- Kotak Mahindra Bank
- State Bank of India
- Axis Bank of India
- IndusInd Bank
- Punjab National Bank
- Bank of Baroda
- Tata Indicash ATM Franchise
- Bank of India
What is the cost of ATM installation?
Installation fees for automated teller machines
“Monthly rentals and a security deposit, which varies from Rs 2 lakh to Rs 3 lakh based on the location, space, and quantity of ATMs placed, are required when leasing out your premises for ATM installation. When the leasing agreement ends, the deposit is returned. However, there won’t be any monthly rentals under an ATM franchise scheme, and you’ll be responsible for paying the site maintenance expenses, which might run anywhere from Rs 25,000 to Rs 30,000, according to Topend Realty property agent Zakir Hussain.
How much rent you can earn from ATM installation?
When it comes to white-label ATMs, the NBFCs who set them up can make a minimum of Rs 15,000 to Rs 25,000. However, there won’t be any monthly rental money if you choose to use a Franchise ATM system. The quantity of transactions every day will determine the amount of money made. Franchised ATM dealers receive Rs. 5 for non-financial transactions and Rs. 15 for cash withdrawals. For example, the total sum generated is Rs 2,500 if there are 200 transactions per day, of which 150 are withdrawals and 50 are non-financial. If all expenses are not included, the landowner can earn between Rs 50,000 and Rs 60,000 a month on average.
Renting your space for ATM installation: Important things to know
Before renting out the area for the installation of an ATM, a landlord should be aware of the following:
- The leased property’s surface area should be between 60 and 100 square feet.
- Every building occupant should have signed a NOC and the ceiling should be constructed of Class-B concrete.
- In addition, the landlord must set aside space for a server room and build network connectivity on the roof.
- Before signing the lease, landlords are required to pay a security deposit of up to Rs 3 lakh. The landlord is responsible for covering the costs of operations, maintenance, and security if they choose to use the franchise model.
ATM franchise Vs ATM rental models: What is the difference?
In rental models, the landlord is required to provide a one-time security deposit of approximately Rs 2-3 lakh when leasing out a business space for the installation of an ATM. The landlord also receives a set monthly rental during this phase.
The franchise model requires a lot smaller initial investment, but there is no monthly rental income. The landlord is also responsible for maintaining the ATM area. If the ATM is situated in a busy area, such as a marketplace, the franchise will be especially beneficial. Additionally, it brings in money in areas where most people deal with cash.
However, the initial outlay and possible revenue are what ultimately determine whether to choose an ATM franchise or rental model.
How to file an application for ATM installation to banks?
Here is an application format that can be used while applying to banks for ATM installation:
To,
The Manager
[Name of the Bank]
[Address of the Bank]
Subject: Proposal to rent a property for the installation of an ATM
Dear sir/madam,
This is to inform you that I would like to lease my property for the installation of an ATM for your bank. With this in mind, I hereby share my personal information as well as information about the property that I intend to lease for the stated purpose.
Name of the applicant:
Address of the applicant:
Phone number of the applicant:
E-mail ID of the applicant:
Address of the property to be leased:
Area in sq ft:
Year of construction:
Distance from the main road:
Proposed rental charges:
Proposed security deposit:
I also declare that the property is free of encumbrances and that I have received No-Objection Certificates (NOC) from the relevant authorities to install an ATM at the site. I have also included photographs of the proposed location for the ATM installation in my application for your review. Please take my application into consideration.
Regards,
Name of the applicant:
Date:
Signature of the applicant:
Mobile number of the applicant:
You may follow this template to submit your application to the bank manager. Make sure to fill in all the necessary details of the property.
Can you negotiate rent with banks for ATM installation on your property?
Negotiating with banks for ATM installation in a commercial property is possible. The rental income from ATM depends on the location and space available. A good negotiation with banks involves effective communication and collaboration. Once implemented along with factors, such as initial connect, terms and requirements and locality benefits, it can help you earn a decent income. By showcasing the advantages of your property, it becomes easier to negotiate with banks and establishes mutually beneficial partnership.
