The Reserve Bank of India (RBI) on Tuesday said it will allow non-banking institutions to set up, own and operate ATMs.
In draft guidelines released on Tuesday, the central bank said: “Such ATMs will be in the nature of White Label ATMs (WLA) 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 guidelines on five transactions per month for using other bank ATMs would not be applicable on WLAs. In such cases, the operator can charge the interchange fee to the issuer bank. “The charges for the transactions should be displayed on the screen before the customer initiates the transaction,” said RBI.
Though there are 87,000 ATMs in the country, the bank said, most are in metros and urban areas. “Tier-III to -VI unbanked and under-banked areas have not witnessed much ATM presence.”
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. The WLA operator should also have a sponsor bank to manage cash and a network operator to connect all its ATMs.
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RBI said the three shall enter into tri-partite service level agreements (SLA) to address issues relating to inter-bank settlement of the transactions and settlement of customer complaints relating to 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.
RBI will set annual targets and ratios between Tier I and II and Tier III-IV centres that WLA operators will have to comply with. RBI said that there has been about 30 per cent growth in the number of ATMs deployed in the country since 2008 but the ATM penetration on a per capita basis continues to be less compared to other countries.
The banking regulator has asked for feedback on the draft guidelines before March 6, 2012, after which it will release the final norms.