News

RBI issues guidelines for white label ATMs

February 16, 2012

In a bid to accelerate the growth and range of ATMs, the Reserve Bank of India this week issued draft guidelines for permitting non-banking entities to set up, own and operate money dispensing machines, said a report at the economictimes.indiatimes.com.

“... it has been decided to permit non-banks to set up, own and operate ATMs to accelerate the growth and penetration of ATMs in the country. Such ATMs will be in the nature of White Label ATMs and would provide ATM services to customers of all banks,” the draft guidelines said.

India currently has about 87,000 ATMs with the number of new deployments rising by 30 percent per year since 2008. However, rural areas have been left out of the boom, a situation that RBI hopes to change with WLAs, the article said.

Regulations in the guidelines include:

• Non-bank entities proposing to set up White Label ATMs must apply to RBI and have a minimum net worth of Rs100 crore ($1 billion), RBI said.
• Only cards issued by banks could be used at the WLAs initially and acceptance of deposits would not be permitted.
• The charges for the transactions should be displayed on the screen before the customer initiates the transaction.
• The WLA operator would be the acquirer for all transactions at the WLA and earn his/her fee accordingly.
• The WLA operator would be permitted to earn extra revenue via on-screen advertising and value-added services.
• The WLA operator would not be entitled to any other fee from issuer bank other than the ‘interchange’ fee payable to acquirer bank under the present bank-owned scenario.
• The operator will have one ‘sponsor bank’ which will serve as the settlement bank for all WLA transactions.

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