Saturday, May 15, 2010

Money: Convenience and Risks

ATM Debit Card
1.      Most liquid under the economic regime in which it has been issued.
1.      Liquidity in the presence and easy access of ATM Machine (filled with money, working in good condition) and your remembrance of the PIN number and being of the Debit card in good condition.
2.      Risks in carrying is (1) Loosing due to absent mindedness, torn pocket, etc.(2) Theft and looting (3)Spoilage of the cash
2.      Risks in carrying is (1) Loosing due to absent mindedness, torn pocket, etc. (2) Forgetting the PIN number. (3)Damage of the card. (4) Lost of the card in the ATM machine. (4) Some one else getting access of the card and the PIN
3.      Risk is limited to the amount present in the pocket/purse/bag etc.
3.      If some one else gets access of the Card and the PIN, the risk involves the emptying of the whole money in the account.
4.      Uneducated person can carry it.
4.      Using it requires some basic education
5.      Physically challenged persons can carry it.
5.      Physically challenged persons like blind cannot personally use it.
6.      Changes of small amounts have many applications.
6.      Getting changes of small amounts is not possible.
7.      It does not provides convenience in carrying, especially the larger amount.
7.      It provides more convenience in carrying.

What should be done to enhance the security in using the ATM Machines (Apart from the secret PIN number)?
1.      Security and Convenience are indirectly related to each other.
2.      It is important to Personalize the Security associated with the use of the ATM cards. Security should be optional as per the user’s need.
3.      Use of computerized and networked Biometric checks at the ATM machine can be thought of.
4.      Restrictions in one time withdrawal of amount, as in the case of amount transfer in internet banking. 
5.      Before drawing the money, especially larger amount, sending of Voice message+/Text SMS to the bank, communicating the purpose of withdrawing the money. The Voice ID of the customer should be maintained at the centralized server of the bank.
6.      Compulsorily having hidden video cameras at the ATM, and at the request of the customer, based on the requirement, the video clip of the transaction from his/her account should be provided along with the time of the transaction.
7.      Unauthorized ATM transaction from the other person’s account should be made a strong criminal offence, with severe punishment.
8.      The ATM facility should reach the nook and corner of the country and its numbers should be adequate.
9.      It should be compulsory for all banks to send the details of all transactions through email, and mobile SMS.
10.  A cheap and easy partial alternative of the ATM cards is Multi city cheque books, payable at par at all the branches of the bank. Like ATMs, i.e. a person can withdraw money from the ATMs of another banks, it should be possible to withdraw money by submission of cheques of any nationalized bank in any of the Core banked branch of the any nationalized bank (i.e. I can withdraw money from say State bank of India’s branch, by submitting the cheque of Yes bank, without having account in SBI and having account in the Yes bank. SBI has largest number of branches and Yes bank has very few branches!).   
      A “Payable at Par at any Bank and any Branch” Cheque should be launched by the banks.              

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