What is ATM: Meaning, Full Form, Benefits, and How It Works

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An ATM Stands for AutomatedTeller Machine, it is a sophisticated electronic device enabling seamless financial transactions, enhancing the efficiency of banking processes.An individual can use an ATM without the help of a bank representative to make transactions or withdraw cash. This electronic banking outlet has made it easy for customers with a debit or credit card to withdraw cash anytime. ATMs are not a new concept, but there is a lot you should know about them to understand the importance of ATMs and how ATMs work.

What is an ATM?

ATM lets you access your bank account and perform financial transactions independently. You can use the ATM if you possess a debit or credit card. The machine allows you to insert the card in machine’s card slot, provide the Personal Identification Number (PIN), and access various banking services.

Types of Automated Teller Machines (ATMs)

ATM has different types based on functionality and location.

Basic Units: These are simple units which allow you to withdraw money, make balance enquiries, and get account statements.
Complex Units: These offer additional features like cash or cheque deposits, bill payments and lines of credit.
On-site ATMs: These are ATMs located within the bank premises.
Off-site ATM: These are ATMs located across various geographical areas outside bank premises.

Classification of ATM’s Based on Purpose is as Follows

White-label: ATMs operated by non-banking financial companies are called white-label ATMs.
Green label: Mostly catered to rural areas, these ATMs help to make agricultural transactions like crop loans, subsidies, insurance and more easier.
Brown label: A third party owns the hardware system of these ATMs. They lease the machines from banks.
Orange label: These are ATMs used for share market transactions.
Yellow label: These ATMs are used for e-commerce transactions like online shopping and bill payments.
Pink label: These ATMs help provide safety for women customers.

Benefits of ATM - Automated Teller Machine

The benefits of ATMs are as follows:

ATM services are available 24×7.
he accessibility of ATMs have reduced the burden on bank employees.
An ATM saves time visiting the bank whenever someone needs to make a transaction.
ATMs make transactions safe and secure, as users need not share sensitive information with others.

What are the ATM’s Used For?

ATMs can be used for various purposes by cardholders. Listed below are some uses of ATMs.

Cash Withdrawals: The most common use of ATMs is the cash withdrawal feature.
Balance Enquiry: ATMs allow account holders to check their balances.
Deposits: Few ATMs have the feature of deposits that allows users to deposit cash or cheques.
Fund Transfer: This is a feature offered by ATMs through which users can transfer funds between bank accounts.

Importance of ATM Machine

ATMs play a pivotal role in simplifying banking services and making them accessible to people. Here are a few advantages of ATMs:

ATMs make it convenient to perform daily financial transactions like withdrawing cash, checking account balance and more.
Advanced banking services are offered by ATMs. For instance, ATMs allow you to transfer money from your savings account to your current account in just a few steps.
Technological advancement has introduced many additional features like opening a fixed deposit, making bill payments, applying for a loan and more.

How does an ATM Work?

The most basic feature of an ATM is cash withdrawal. The steps to withdraw money from an ATM are as follows:

Inset Debit or Credit Card: Once you find an ATM, look for a slot to insert a card.
Select Preferred Language: Once your card is inserted, the machine will ask you to choose a preferred language.
Enter your PIN: To make transactions, enter the PIN.
Choose Transaction Type: After you enter the PIN, you can choose the transaction type to withdraw cash or balance enquiry.
Select Bank Account Type: Select savings or current accounts according to your account type.
Enter Required Amount: Enter the amount you want to withdraw from your account.
Collect Cash: After confirmation, the cash will be dispensed, and you can collect it.
Print Receipt: If you want to receive a receipt for the transaction you made, you can select the print receipt option.

ATM in Banking: History & Significance

Barclays Bank first introduced The Automated Teller Machine in London in the late 1960s. Although there were many drawbacks, this machine was developed to provide banking services to customers after banking hours. With technological advancements and the introduction of features like PIN, the design and security of ATMs have increased tremendously.

The popularity and demand for ATMs rose during the late 1980s. As more and more people started using ATMs, banking was more convenient for users. One was allowed to withdraw money, check account balances, deposit money and use many other banking services. As time passed, ATMs have evolved with many additional features and options.

Locate Kotak Bank ATM

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Kotak Mahindra Bank has installed numerous ATMs across the country that can be used by any cardholder. The self-service system of ATMs makes them convenient and easily accessible for everyone. Whether you hold an account in the same bank or not, you can use any ATM. Depending on the bank and the number of uses, a nominal fee may be charged.

For Grievances Regarding ATM Services

In case you have any queries/complaints regarding ATM transactions such as non/short dispense of cash, card capture, etc. :-

Kotak Mahindra Bank Customers

Please feel free to reach us through any one of the following means:

You may call our 24x7 Customer Contact Centre on 1860 266 2666* and register your complaint. Click here (for more details on how to reach us).
You may write to us and register your complaint.
You may write a letter to us at Kotak Mahindra Bank Ltd. P.O. Box: 16344, Mumbai - 400013.
You may visit any of our bank branches to register your query/complaint.

To Download the ATM Grievance Form

Please click here to download the ATM grievance form.

List of ATM’s with Ramps

Click on PDF to Download ATM’s with Ramp Details

Frequently Asked Questions

1. What is the full form of ATM?

ATM stands for Automated Teller Machine and helps bank account holders make various financial transactions independently. The convenience and high accessibility of ATMs have led to an increase in their use.

2. What are the various transactions performed at an ATM?

The various transactions performed at an ATM include cash withdrawals, transfer of funds, balance enquiry, and account deposits.

3. What are the limits of Cash transactions in ATMs?

Usually, the cash withdrawal limit varies between Rs. 25,000 and Rs. 1,00,000, depending on the bank and the type of card you hold.

4. What are the ATM usage charges?

Banks charge for ATM usage, but the charges vary based on the type of account and card you hold.

What is ATM? Meaning, ATM Full Form & How ATM Works?