India's largest lender, State Bank of India (SBI) has signed pact with Ohio-based ATM maker Diebold for placing the order of ATMs in the country. The bank has recently closed a tender for the purchase of 4,000 ATMs and out of these 75% is decided to be installed by Diebold.

As per the contract, Diebold will provide SBI with its full-function model D450 ATM that is especially designed for the Indian market. A statement issued by Diebold mentioned, "The D450 ATM has the smallest footprint compared to the other ATMs in the Indian industry. Adding to SBI's current network, the D450 will feature Diebold's Agilis® XV 91X software and a 15 touch-screen." Presently Diebold provides managed services solutions for more than 3,500 ATMs of SBI in the country.

The order placed with Diebold includes 200 ATMs with the fingerprint biometric feature identity verification and 200 CDs with barcode reader. It also consists of ATM site preparation for 2,740 ATMs. MD of Diebold India, Naresh Hosangady said "The proposed ATM sites are environmental-friendly and unique from a conventional ATM site. These sites will be designed for lower-power consumption and maintenance cost, in turn, enhancing operational efficiency. The time taken for complete commissioning of the ATM sites will be much less than a conventional site,"

The ATM network of the bank is going to extend to 12,000 installations once the contract is complete. SBI has earlier announced to expand its ATM network to 25,000 by 2010. Ever since the bank started its core banking solution about two years back, it has issued debit cards to almost all its account holders. The debit card availability is expected to shift the transactions from branches to ATMs.

The bank expects demand from its own customers as well as customers of other banks. In fact RBI has directed banks to allow their customers a free access to the ATMs of other banks. Nevertheless the banks will estimate the net transaction cost amongst themselves.

Mr Hosangady said that many banks are still looking for fresh deployment even after the RBI direction of free access of third party ATMs. "We do not see any slowdown in the ATM deployments, most of the large banks are deploying more ATMs this year than they did last year and are looking at increasing their ATM network across the country," he said.

Meanwhile both SBI and Diebold have not yet calculated the deal size but bankers estimate that the total cost of the machine would be more than Rs 150 crore.