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India’s small FIs look to white label ATMs for affordable expansion

May 29, 2014

Small private banks in India are looking for ways to increase their footprint without adding to their overhead, and to do it, they’re eyeing a relaxed ATM policy that allows white label IADs to set up machines under the auspices of a bank.

According to India's Business Standard, the Catholic Syrian Bank is one small FI considering this approach.

“We have a very lopsided ATM network where the number of ATMs that we have is half of the number of branches,” Bharath Mani, CSB head of retail marketing and product management, told the publication. “Usually, it is the other way around.”

For an FI, it costs 8–10 lakh rupees ($13,570– $16,962) to install an ATM in a metro area, with monthly maintenance (excluding site rental) ranging from 45,000–50,000 rupees ($763–$848).

For a white label provider, the cost runs closer to 3–5 lakh rupees ($5,089–$8,481), Sanjeev Patel, CEO of Tata Communications Payment Solutions Ltd. told the Standard. The provider can break even within six to 12 months, he said.

To date, TCPSL is the only IAD to have installed WLAs in India. It is widely reported that the white label program has been exceptionally slow to get off the ground.