Axis Bank is planning to acquire around 3,500 to 4,000 ATMs that are currently managed by AGS Transact Technologies, a service provider facing financial troubles. The bank is looking to transfer these machines to a new service provider due to concerns over declining service quality, according to people familiar with the matter.
Why Axis Bank Wants to Change Its ATM Vendor
Sources say that Axis Bank has initiated discussions with AGS Transact to take control of these ATMs. The bank is unhappy with the declining service standards and wants to ensure better customer experience. Before finalizing the purchase, Axis Bank will conduct a thorough audit of these ATMs to assess their condition, taking into account depreciation, maintenance, and upgrade costs.
A spokesperson for Axis Bank confirmed these discussions, stating, “We are in talks with AGS Transact and evaluating the option of taking over these ATMs.”
AGS Transact’s Financial Troubles Impacting the ATM Network
AGS Transact has been struggling with financial difficulties, which have impacted its ability to manage ATMs efficiently. The company, which once handled over 75,000 ATMs and cash recyclers, has already lost control of more than half of them as banks move to alternative service providers.
Reports suggest that AGS Transact has defaulted on dues worth ₹726 crore, leading to concerns over possible insolvency. As a result, credit rating agencies like Crisil and India Ratings have downgraded its ratings due to the high risk of debt default.
How This Affects Axis Bank Customers
Axis Bank currently operates over 15,000 ATMs and cash recyclers across India. Despite the challenges with AGS Transact, around 80-85% of its ATMs are still functioning without major disruptions. However, to maintain reliable ATM services, the bank is actively looking for a new service provider to take over the machines previously managed by AGS.
The existing agreement between Axis Bank and AGS Transact follows a Brown Label ATM model. Under this arrangement, AGS Transact manages all aspects of ATM operations—including leasing, maintenance, cash handling, and network connectivity—while the ATMs display Axis Bank’s branding. With AGS struggling financially, Axis Bank is now working on transitioning to a more stable service provider.
What’s Next?
Before finalizing the switch, Axis Bank must first complete the acquisition of these ATMs from AGS Transact. Once the deal is completed, the bank will then move forward with integrating a new vendor to ensure seamless ATM operations for its customers.
Meanwhile, AGS Transact’s financial struggles continue to impact the broader banking sector. Other major banks, including State Bank of India, ICICI Bank, India Post Payments Bank, Yes Bank, HDFC Bank, and Kotak Mahindra Bank, have also been affected, as they too had agreements with AGS Transact for ATM services.
As the situation unfolds, customers can expect Axis Bank to take necessary steps to ensure uninterrupted access to cash withdrawal and ATM services.
