WHITE
LABEL ATMS - ECONOMY
News: White Label ATMs (WLAs) to drive ATM
penetration in India with a greater focus on Tier III to VI centres
What's
in the news?
● Recently,
the Reserve Bank of India (RBI) permitted non-bank companies to set up, own and
operate White Label ATMs (WLAs) in the country.
Key
takeaways:
● This
has been done in order to drive ATM penetration in the country with a greater
focus on Tier III to VI centers.
White
Label ATMs (WLAs):
● These
are the Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities.
○ Non-bank
entities incorporated in India under the Companies Act 1956 are allowed to
operate WLAs.
Backdrop:
● The
government permitted Foreign Direct
Investment (FDI), up to 100%, under the automatic route.
● Non-bank
entities are permitted to set up WLAs in India, after obtaining authorization
from RBI under the Payment and
Settlement Systems (PSS) Act 2007.
● Such
non-bank entities should have a minimum
net worth of Rs 100 crore.
● Tata
Communications Payment Solutions Limited (TCPSL) was the first company
authorized by the Reserve Bank of India (RBI) to open White Label ATMs in the
country.
Significance
of WLA:
● It
enables the transactions of all bank
customers by establishing technical connectivity with the existing
authorized, shared ATM Network Operators or Card Payment Network Operators.
● The
operators are entitled to receive a fee
from the banks for the use of ATM resources by the bank’s customers and are
not permitted to charge bank customers directly.
● Cash in ATMs is provided by the
sponsored bank while the ATM machine does not have any
branding of the Bank.
Services
Provided by WLA:
● Dispensing
cash (Cardless cash withdrawals at ATMs)
● Account
Information
● Cash
Deposit
● Regular
Bill Payment
● Mini/Short
Statement Generation
● PIN
Change
● Request
for Cheque Book