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Current Affairs 2023

National Financial Switch - UPSC Current Affairs

National Financial Switch (NFS) is the largest network of shared ATMs in India. Developed by IDRBT Hyderabad in 2004, it enables interconnectivity of bank switches, connecting all ATMs in the country and providing convenience banking for all citizens. Presently, run by NPCI, it enables non-scheduled cooperative banks and regional rural banks to access the wide network of ATMs in the country.

Jan 22, 2023

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National Financial Switch (NFS) is the largest network of shared automated teller machines (ATMs) in India. Developed and deployed by the Institute for Development and Research in Banking Technology (IDRBT), Hyderabad, in 2004, NFS enables the interconnectivity of bank switches, allowing transactions made at any ATM to be routed to connected banks. The goal of NFS is to connect all ATMs in the country, providing convenience banking for all citizens of India. It is run by the National Payments Corporation of India (NPCI). As of January 2022, NFS had 1,203 members and connected to more than 2.55 Lac ATM.

 

IDRBT, being the pioneer of ATM switching service, handed over the operations of NFS to the National Payments Corporation of India (NPCI), the principal institute responsible for all retail payment systems in the country. NPCI allows any bank that provides core banking services round the clock, with or without ATMs, to become a part of the NFS network through a sponsor bank. This enables non-scheduled cooperative banks and regional rural banks to access the wide network of ATMs in the country, providing their customers with banking services through any connected bank's ATM.

 

The first ATM in India was set up in 1987 by HSBC in Mumbai, but it wasn't until 1997 that the Indian Banks' Association (IBA) set up the first network of shared ATMs in India, called Swadhan. However, it was shut down in 2003 due to operational unprofitability. In response, IDRBT announced it would be creating NFS to link the country's ATMs in a single network. IDRBT collaborated with Euronet Worldwide and Opus Software to build the platform and launched NFS on 27 August 2004, connecting the ATMs of three banks. By December 2009, the network had grown to connect 49,880 ATMs of 37 banks and emerged as the largest network of shared ATMs in India.

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