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Like most girls her age, 11-year-old Kavisha Jagasheth, a schoolgirl from Mumbai, loves studies and hates exams. But unlike most children her age, she doesn't ask her parents for pocket money. Instead, she just uses her debit card to withdraw money from the ATM. Kavisha's sister Urvisha, 7, also has a debit card. Before long, they will represent the ever-growing breed of young people who are forcing banks to change banking. The mantra: "Catch them young and watch them grow".

Not that grown-ups haven't changed. Noida-based Pawan Arora has forgotten what a bank looks like from inside. A pilot with Jet Airways, Arora has not stepped into one for almost five years now. He banks from his house and even while on the move-through the Internet. Ditto for P.J.B. Noble, who works for a Bangalore-based tech start-up. Noble and his wife Anitha don't have the time to go to the bank and stand in a queue. They just log on to their bank through the Internet or give instructions on the phone or hop across to the neighbourhood ATM counter.

Pawan Arora, Commercial pilot A high-flyer, banking was a pain for Arora for he had to visit the bank almost every third day-for withdrawing cash, depositing cheques, updating passbooks or getting drafts made. In 1995, Arora opened an account for himself and his family with HSBC. They have not had to visit the branch ever since and use the ATM, phone and Net instead. "I have not visited my bank branch for seven years now. We bank through the Net, phone and ATM."

Yes, more and more Indians have decided that the days of going to dreary bank buildings, standing in serpentine queues and having to put up with an unwilling clerk are over. The branch is now coming into the customer's home (through the Internet) or into his trouser or shirt pocket (courtesy mobile banking) or his neighbourhood (through ATMs which are springing up faster than ever). Driving the change is a clutch of foreign banks which have decided to shed their elitist image and go for the mass retail market and some new generation private Indian banks. Some nationalised banks too are shedding their stodgy images and jazzing up their services in a bid to keep up with the trend. "Customers are short of time and want to deal in their own time. This is driving the concept of the one-stop financial shop," says Aditya Puri, managing director, HDFC Bank.

One of the hubs of this change is the ATM, the machine that has changed Indian banking from a nine-to-two bother into a 24/7 convenience. In August 2000, ICICI Bank had only 150 ATMs across the country. It now has 800 and plans to set up another 1,000 within a year. "Till 18 months ago, 95 per cent of all our banking transactions took place inside a branch. Now only 45 per cent do," says Chanda Kochhar, executive director, ICICI Bank.

"We have just one branch and 52 ATMs in Bangalore. This means that customers are never more than 3 km from an ATM. We wanted to be a branchless bank," says Sarvesh Sarup, Citibank's global consumer banking head for India.

Personal Banking

BANK PLUS New services being offered by banks to their customers Universal ATM cards Banks are providing ATM cards that work on ATMs of other banks also. Stanchart's card works on all ATMs on Visa network.   Child banking Invest in mutual funds and bonds through savings bank account for child. Debit cards for children, plus free insurance.   Net banking Use the Net to access account, get statements on e-mail, make online payments and issue e-cheques. Also, bank on the phone.   Get paid for paying Pay electricity and phone bills and insurance premium through bank accounts. ICICI Bank offers incentives for such payments.

ATMs are more than machines that give you cash on request. They can give a customer his account statement, accept cash and cheque deposits, even process an application for a new cheque book. In Delhi, Airtel subscribers can top up their prepaid mobile phone card at an ATM. HDFC Bank processes cheque book applications received through its ATMs faster than those received at the branch. "We are telling customers not to run to their bank, but to run their bank," says Vivek Kudva, HSBC's country head, personal financial services.

Banks like Citibank have gone so far as to charge its Suvidha account customers Rs 100 for transacting at a branch instead of using the ATM. Anything to prevent a customer from visiting a branch to withdraw money or deposit a cheque. Making things even better for the consumer are the tie-ups between different banks for ATM usage. This has more than quadrupled the ATM reach of these banks. Early this year, Standard Chartered launched a debit card that could be used at ATMs of all banks in the Visa network. Overnight the bank's network of 75 ATMs expanded to over 2,000.

Of course, there are other ways to keep the customer away from the counters. Net banking, for example. Most banks today offer customers the convenience of e-banking. A customer can log on to the Internet, access his bank account, even transfer money to any account without issuing a cheque, through e-cheque. Fixed deposits can be made with the click of the mouse and loans are just a few keystrokes away. Some banks allow you to pay your phone and electricity bills through the Net. WAP-enabled mobile phones even allow customers to buy and sell stocks and shares while on the move. The meteoric rise of the short messaging service (SMS) has allowed banks to provide an array of basic banking services. "Earlier the branch was the bank. Now the ATM or the Internet is the bank," says P.J. Nayak, chairman and managing director, UTI Bank.

"Regulations allowed only six branches in four cities. So we have put up ATMs instead. We want to be a branchless bank." Sarvesh Sarup, Head, global consumer banking for India, Citibank

"We are telling our customers not to run to their bank, but to run their bank."

Vivek Kudva, Country Head (Personal Financial Services), HSBC

But there is a problem. Many Indians do not like speaking to a machine. Not yet. They feel more comfortable interacting with someone. Someone they can talk to. So banks have invested millions of rupees in setting up call centres that allow customers to speak to someone in case of a problem.

The change is as drastic culturally as it is commercially. Foreign banks, which once insisted on a minimum balance equal to what a middle-class Indian saved in a year, are now aggressively wooing the middle (and even the lower middle) class. Of Citibank's five lakh customers in India, more than 40,000 are blue-collar workers. Students of educational institutions in Manipal use ICICI Bank debit cards to pay for photocopying, to buy books and stationery, even settle the canteen bill. ICICI Bank calls it the e-Purse.

Does all this mean that banks will now be manned by just a few senior officials and supercomputers? Far from it. "The role of banks would be to provide a long-term investment strategy to customers," says Kudva. Customers won't visit banks for withdrawing money or depositing cheques but to get expert investment advice. As Akshay Kumar, head of marketing for consumer banking, Standard Chartered Bank, says, "Banks will no more be just a place from where you take out cash. They will now be like fast-moving consumer-goods companies." They will become retail outlets for insurance, mutual funds and loans.

Kavisha & Urvisha Jagasheth, Schoolgirls Kavisha, 11, and Urvisha, 7, are proud owners of Citibank Junior Package debit cards which they use to withdraw money from an ATM. The card also provides health and life insurance for them and their parents. "We are the only ones in our class to have ATM cards and have used them twice in two months."

Consumer and housing loans will also be important revenue streams. Today, more than 70 per cent of all cars sold and eight out of 10 consumer durables sold in the country are through loans. And the home loan market is expected to cross Rs 15,000 crore in 2001-2 from Rs 7,000 crore in 1998-99.

While all these changes sound phenomenal, the teething troubles are also beginning to show up. Many banks are finding it difficult to manage their growth. Internet sites are often down, ATMs are often too crowded, nullifying the very purpose for which they were set up. Banks will need to tie up all these loose ends if they want to keep the customer satisfied.

The Jagasheth sisters are not the only pre-teens with plastic money. Many more are set to join their ranks. For instance, Delhi Public School recently wrote to parents urging them to open Citibank Junior accounts for their children through which their school fees could be paid directly.

By the time Kavisha is old enough to sign cheques (18 is the age as per law), there may be no cheques to sign. Who knows, by then banking may have changed yet again, and ATMs may only be for the old-fashioned.

-with Stephen David and Malini Goyal