There has been a significant rise in the volume of ATM transactions since April 1, following the RBI's notification to make all inter-bank ATM transactions free of charges. The increase has been more significant in the tier-two cities.

Pradeep Sen, managing director, NCR Corporation, said, "most banks have been expanding their ATM networks and gaining through the increased fees they earn due to the enchanced ATM usage."

Though there have been several reports of faulty ATM transactions, the volume of ATM transactions has increased with the customers making smaller-multiple transactions.

Anand Gupta, head of alternate channels at Dhanlakhsmi Bank, said, "What is heartening is that customers are opting to use ATMs of other banks and yet not reducing the same with their parent banks."

Senior vice president and head of alternate channels at Axis Bank, Aspy Engineer, said, "We have seen close 40-50% rise in both, our customers using other bank ATMs and other customers using ours."

As of now, banks continue to pay a standard fee (upto Rs 18) for every transaction done, but the same cannot be passed on the bank customers. Banking majors, have been persuading RBI for a system where the ATM usage fee paid for the transactions is related to the number of banks' ATM. The thought led by SBI, will encourage the banks to expand their existing ATM network. Commenting on the same, Engineer, "One needs to ensure that a large deployer of ATMs is adequately compensated for setting up the large common infrastructure that can be used by all banks."

Parag Jariwala, an analyst at CARE Ratings, said, "Banks may go slow on opening new ATMs since it is no longer an attraction to woo customers."

However, Engineer confirmed that the bank is aggressive on expanding its ATM network, but has been rethinking its branch expansion strategy. He also indicated deployment of more enabled and sophisticated ATMs which would be capable of handling multiple branch activities and reduce load on the branches.