Mumbai: The Rs 20,000-crore private security industry in general, and the ATM security sector in particular, is in for a big churn if plans of the Kerala-based Muthoot Pappachan Group to meet their safety needs of the financial sector players pick up.
The Muthoot Pappachan Group, with its flagship gold financing arm Muthoot Fincorp, has floated a new company-MPG Security Group-to take its "technologically advanced security services through emergency response teams (ERTs)" nationwide.
The Kochi-based diversified group has also roped in Raman Srivastava, the ex-Kerala top police officer and also the former director general of the BSF, as its chief security advisor, the company said.
"MPG Security Group and its emergency response teams are the first of their kind initiatives in the country's Rs 20,000-crore private security market," Muthoot Pappachan Group chairman and managing director Thomas John Muthoot told PTI.
"While we see large potential for every company that employs private security and needs technologically advanced security solutions, we see an immediate potential from the banking sector, especially for their ATM security," he said.
Muthoot said the company is in discussions with a leading ATM security provider to offer ERT services to the around 2-lakh-odd ATMs deployed across the country.
Stating that banks lose heavily in their ATM business, primarily due to the huge cost involved in deploying security personnel, Muthoot described manned security as a sheer waste of resources as technology like the one his company offers can take care of such needs. He also said ERT-based security services are in vogue in the Western markets.
He said banks on an average spend around Rs 50,000 a month to protect an ATM alone. This works out to be around Rs 1,000 crore for the sector a month that has around 2 lakh cash vending machines deployed.
Last year, largest lender SBI said it had lost over Rs 350 crore in its ATM business, a good portion of which was spent towards manning these machines that count around 60,000, making it the largest operator of ATMs in the country.
"If banks adopt our technology tool, they can save hundreds of crores in security cost alone," Muthoot said, adding, "Muthoot Fincorp alone had spent Rs 70 crore last year on security cost, which is one-third of its net profit. My objective is to bring it down to around Rs 10 crore a year."