News

RBI expands banking to include white label ATMs

February 15, 2012

The Reserve Bank of India this week said that it will allow non-banking institutions to set up, own and operate ATMs, according to a news story at BusinessStandard.com. In draft guidelines the central bank said: “Such ATMs will be in the nature of White Label ATMs and would provide ATM services to customers of all banks.”

The WLA operator can earn fees from the banks as acquirer for all transactions but will not be allowed to charge customers. “The charges for the transactions should be displayed on the screen before the customer initiates the transaction,” said RBI. The WLA operator can also earn extra revenue through advertisements and by offering value-added services.

In the proposed guidelines, RBI said that the prospective WLA operator should have minimum net worth of Rs 100 crore ($1 billion). The WLA operator should also have a sponsor bank to manage cash and a network operator to connect all its ATMs. The three would enter into tri-partite service level agreements to address issues relating to interbank transaction settlements and settlement of customer complaints about failed ATM transactions. “The SLAs should clearly spell out the role of each party,” said the draft circular. The issuer bank will be responsible to address customer grievances in cases of failed ATM transactions.

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