In the modern banking era, Automated teller machines (ATMs) play a crucial role in providing customers with 24/7 access to financial services. If you’re considering entering the franchise world, investing in an SBI atm franchise, sbi atm franchise cost could be a good opportunity.
The State Bank of India (SBI), being one of the largest and most reputable banking institutions in India, has a vast network of ATMs across the country. In this blogs, We’ll delve into everything you need to know about the SBI ATM franchise, including sbi franchise investment details, profit margins, documentation requirements, and the advantages and disadvantages of this venture.
By the end of this article, you’ll have a thorough understanding of whether an SBI ATM franchise is the right investment for you or not.
Franchise Brand Profile:
| Brand Name: State Bank of India (SBI) |
| Founded By: Government of India |
| Founded Year: 1955 (as SBI) |
| Total Outlets: Over 22,000 ATMs (as part of a network of over 58,000 SBI and non-SBI ATMs) |
| Last Year Revenue: ₹2,66,728 crore (approximately $36 billion in 2023) |
| Headquarters: Mumbai, Maharashtra, India |
About the Brand
State Bank of India (SBI) is a major public sector bank headquartered in Mumbai. It is the 47th largest bank in the world by assets and the only Indian bank in the 2020 Fortune Global 500 list, ranking 221st.
In September 2022, SBI became the third Indian bank and seventh Indian company to achieve a market capitalization of Rs 5 lakh crore.
SBI’s roots go back to 1955 when the Indian government took over the Imperial Bank of India, with the Reserve Bank of India acquiring a 60% stake and renaming it State Bank of India.
SBI ATM Franchise Overview
- Objective: The main objective is to expand the reach of SBIs ATM network to provide convenient banking services to more customers, especially in underbanked and rural areas. SBI ATMs offer a range of services including cash withdrawals, balance inquiries, mini-statements, fund transfers, and more.
- Franchise Model: SBI offers a franchise model where individuals or businesses can install and operate SBI branded ATMs. This partnership helps SBI enhance its network while providing entrepreneurs with a business opportunity. Advanced ATMs provide additional services such as cash deposits, cheque deposits, and bill payments, enhancing customer convenience.
- Revenue Model: Franchisees earn revenue based on the number of transactions conducted at their ATM. SBI typically offers a fixed fee per transaction to the franchisee, providing a steady income stream.
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SBI ATM Franchise Investment Details Breakdown:
Applying for SBI ATM franchise, a security deposit of Rs 2 lakh and working capital of Rs 3 lakh are required for the approval. That means, total investment is Rs 5 lakh. It should also be noted that the amount may differ from one company to the next.
You will get Rs 8 for every transaction in cash and Rs 2 for non-cash transactions such as fund transfers and balance checks.
The expected ROI (Return on Investment) is in the 33 to 50% range when calculated annually. This means earning at least ₹45,000 per month at 300 transactions per day. If you increase the minimum transactions to 500 transactions/ day, you can earn ₹90,000 or more per month!
| Banking Infrastructure Investment | ATM-Related Service Providers | Direct Investment Opportunities | Bank Fixed Deposit and Savings Accounts | Mutual Funds and ETFs |
|---|---|---|---|---|
| Bank Stocks: Investing in stocks of banks like SBI, which invest in their own ATM networks. | Companies Providing ATM Services: Firms that manage and operate ATMs for banks (e.g.,Diebold Nixdorf, NCR Corporation). | Franchise Models: Some Companies offer franchise opportunities for owning and operating ATMs, often in partnership with banks. | Fixed Deposits (FDs): Safe investment options provided by banks like SBI with fixed interest rate. | Banking Sector Mutual Funds: Investing in mutual funds that focus on the banking sector. |
| Technology Providers: Investing in companies that manufacture or provide technology for ATMs and banking infrastructure. | Payment Processors: Companies like Visa, Mastercard, or Paypal which facilitate transactions that occur at ATMs. | Recurring Deposits (RDs): Another safe investment where investors deposit a fixed amount regularly. | Exchange-Traded funds (ETFs): ETFs that track banking indices or technology sectors that include ATM-related services. |
SBI ATM franchise Profit Potential:
SBI ATM franchises can offer potential for good passive income, but it’s important to consider several factors to understand how profitable it might be for you. Here’s a breakdown:
Earning per Transaction: SBI offers ₹8 per cash withdrawal and ₹2 per non-cash transaction (balance check, mini statement etc.).
Transaction Volume: Your profit hinges on how many people use the ATM. Ideally, you’d want 300-500 transactions daily to reach the advertised profit range.
Investment & Profit Ratio short Note:
The total investment required to open an SBI ATM franchise is Rs 5 lakhs, which includes a security deposit of Rs 2 lakhs and working capital of Rs 3 lakhs.
The profit rate or commission offered by SBI is Rs 8 for every cash transaction and Rs 2 for every non-cash transaction.
The return on investment (ROI) is expected to be between 33 and 50% annually.
The monthly income can range from Rs 45,000 to Rs 90,000, depending on the number of transactions per day
Requirements to Open the SBI ATM Franchise:
- Location: A strategic and high-traffic location is essential. The site should have easy accessibility and visibility.
- Space requirements : A minimum of 50-80 square feet area is required to set up the ATM.
- Infrastructure: Basic infrastructure such as electricity, a stable internet connection, and proper security measures are necessary.
- V-Sat Installation: The V-Sat installation used for the ATMs functioning will need a NOC or No Objection Certificate from the owner, authorities or/and society as applicable.
Documents Required for the SBI ATM Franchise
To apply for an SBI ATM franchise, you will need to submit the following documents:
- No Objection Certificate (NOC): From the local municipality or authority for installing the ATM.
- Business Registration to start: Proof of business registration if applicable.
- Identity proof (Aadhaar Card, Pan Card, Voter Card)
- Address proof (Rashan Card, Electricity Bill)
- Bank Account/Passbook
- Photograph
- Email id
- Phone number
- GST Number
- Financial documents
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How to start SBI ATM franchise business:
Here are the steps to contact SBI ATM franchise business
- Visit the Official Website:
Start by visiting the official website of SBI
- Read the Guidelines and Fill in the Application Form
Carefully read through the guidelines and eligibility criteria for the SBI ATM franchise. Then, fill out the online application form provided on the website.
- Submit the Application
After ensuring all the information and documents are in order, submit the application electronically through the online portal.
- Wait for Verification and Further Communication
The SBI franchise team will review and verify your application. If approved, they will reach out to you for further steps.
- Agreement and Training
f your application is granted, you will need to sign the necessary bank agreements and undergo training on the operation and maintenance of the ATM.
- Coordination with ATM Installation Company
SBI works with companies like Tata Indicash, Muthoot ATM, and India One ATM for ATM installation and maintenance. The selected company will handle the installation and ensure the ATM is set up as per the requirements.
Still SBI Franchise Worth the Investment? (Advantages & Disadvantages)
Are you thinking still SBI franchise investment is worthy? Below you will find the answer.
Advantages of ATM franchise
- Brand Recognition: SBI is one of the largest and most recognized banks in India. Associating with such a reputed brand can bring credibility to your business and attract more customers.
- Wide Customer Base: SBI has millions of customers across India. By having an SBI ATM franchise, you can tap into this vast customer base, potentially increasing foot traffic to your location.
- Low Operational Costs: Compared to other businesses, running an ATM has relatively lower operational costs.
- Diversification of Income: If you already own a business, adding an SBI ATM franchise can diversify your income streams, providing an additional revenue source.
Disadvantages of ATM franchise
- High Initial Investment: Acquiring an SBI ATM franchise typically requires a significant initial investment, including franchise fees, equipment costs, and security deposits.
- Maintenance Costs: Ongoing maintenance and security costs can add up.
- Dependence on SBI: As an SBI ATM franchisee, your business is dependent on the policies, procedures, and technological infrastructure of SBI. Any changes or disruptions in these areas could impact your operations.
- Revenue Sharing: SBI may require franchisees to share a portion of their ATM transaction revenue. This revenue sharing arrangement can reduce the profitability of the franchise compared to owning an independent ATM.
Conclusion
The conclusion regarding investing in an SBI ATM franchise would depend on various factors, including financial considerations, market analysis, and regulatory requirements. Ultimately, the decision to invest in an SBI ATM franchise should be based on a thorough analysis of these factors and a realistic assessment of the potential risks and rewards involved. Consulting with financial advisors, legal experts, and other franchisees can also provide valuable insights before making a final decision.
FAQ:
The initial costs involved in starting an SBI ATM franchise are:
Security Deposit: Rs 2 lakhs, which is fully refundable.
Working Capital: Rs 3 lakhs, which is necessary for the operation of the ATM.
The total investment required to open an SBI ATM franchise is Rs 5 lakhs
The average monthly profit from an SBI ATM franchise can range from Rs 45,000 to Rs 90,000, depending on the number of transactions per day. For example, if there are 250 transactions per day, the monthly income will be close to Rs 45,000. If there are 500 transactions per day, the monthly income will be around Rs 88,000 to Rs 90,000
The break-even period for an SBI ATM franchise can vary depending on several factors such as the number of transactions per day, the type of transactions (cash or non-cash), and the overall efficiency of the ATM. However, based on the average monthly profit of Rs 45,000 to Rs 90,000, here are some general guidelines:
Low-traffic ATM: If the ATM has a low transaction volume, it may take around 6-12 months to break even, considering the initial investment of Rs 5 lakhs.
Medium-traffic ATM: For an ATM with a moderate transaction volume, it may take around 3-6 months to break even.
High-traffic ATM: If the ATM has a high transaction volume, it may break even within 1-3 months.
Sources?
Annual Maintenance: Annual maintenance costs are typically around Rs 1.5 to Rs 2 lakhs, depending on the location and usage of the ATM
GST and Taxes: GST and other taxes are applicable on the transactions and profits of the ATM franchise
Transaction Fees: The franchisee earns Rs 8 for every cash transaction and Rs 2 for every non-cash transaction
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