From swadhan to nirdhan?

Venkatachari Jagannathan
20 May 2002

Swadhan is a shared payment network service operated in Mumbai under the auspices of Indian Banks' Association (IBA), enabling customers of various banks to use any ATM for convenience, while banks earn revenues by sharing their ATM infrastructure.

Armed with a Madras High Court order, ACI has sent a notice to the Rs 3-crore turnover ISC and IBA about its decision to remove the networking software/Base 24 switch licensed by it. The company has also informed its decision to initiate winding up proceeding against ISC. The software/Base 24 switch is housed at ISC's Mumbai office.

Apart from ACI, Compaq on its part has informed its decision to start winding up proceedings against ISC. Curiously, the two companies are partners in the four-way joint venture ISC. The other two partners are HMA Data Systems and Financial Software and Systems, based in Chennai.

Likely to be caught in the crossfire are Swadhan member banks and their customers. The member banks will be losing their revenue stream (Rs 5 per transaction), while customers will be restricted to using only the ATMs owned and operated by the bank in which they hold their account — provided that the bank has a switch of its own. The network has been operating for the past five years.

IBA, the coordinating body for Swadhan network, is twiddling its fingers for its acts of omission and commission. "We will see to that the network does not fail and all steps will be taken towards ensuring that," says an IBA official.

He also says IBA is deciding on various options — allowing ISC to migrate to a different technological platform or even re-tendering the project and select the same or a new service provider. But he does not guarantee the continuous working of the network without any disruption when ACI plugs out its software.

Says D Balaji Chandran, vice-president and group financial controller, HMA group, to which ISC belongs: "We will migrate to a new technology platform called Oasis, as informed to IBA; 80 per cent of the work is over in this connection. But there will be minor disruption in the services." Group chairman Harish K Murthi is not in India to comment on the imbroglio.