Banks with a large network of ATMs will now be permitted by the Indian finance ministry to use their ATMs to generate additional revenue by advertising financial products offered by other institutions, according to a news report at rediff.com.
The finance ministry expects the move to promote greater financial inclusion and also to motivate banks to install ATMs in remote areas. RBI will soon issue guidelines for advertising.
India currently has about 80,000 ATMs; the State Bank of India, which has the largest share in these ATMs, is likely to gain the greatest financial benefit from the new policy. Banks with a small ATM network would benefit by getting more visibility for their products at large bank ATMs.
A finance ministry official said the industry had long demanded permission to advertise financial products of other banks and financial institutions for a fee. The official added that the advertising revenue would enable banks to reduce transaction costs of ATMs.
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