The Reserve Bank of India (RBI) has identified 17 non-bank entities out
of 19 which applied for setting up White Label ATMs. Two of them
including a Tata group company are expected to be operational in next
few months.
"We had already issued five licences and recently we have given seven
more," Vijay Chugh - chief general manager (Department of Payment &
Settlement Systems), RBI; told reporters speaking on the sidelines of a
conference here in Mumbai.
"So far, we have found 12 eligible candidates for setting up White Label ATMs. We are expecting one or two operators to be in business in the next few months. One of them is Tatas. Those all are non-bank corporate entities. In next three years 1.5 lakh such ATMs would be rolled out if all 17 become operational," he said.
What is White Label ATM (WLA)?
White Label ATM means an automated teller machine that does not have any label of any bank. Here, there are three inherent parties: the non-bank corporate entity, authorized ATM network operators/card payment network operators like RuPay, Visa or MasterCard and a sponsor bank for cash management, funds settlement as well as customer grievance redressal.
In June, 2012; the central bank had issued guidelines for setting up of White ATMs. It had designed three schemes to apply for the same. Each scheme has certain criteria considering banking coverage ranging from tier I tier VI cities and towns.
It is learnt that most of the applicants have applied for the scheme A which is 3:1 in favour of rural set-ups. This means, for every 3 WLAs installed in Tier III to VI centres, 1 WLA can be installed in Tier I to II centres. Out of the 3 WLAs installed in Tier III to VI centres, a minimum of 10 per cent should be installed in Tier V & VI centres.
Charges for WLAs would be as par the banking sector. It is Rs 15 per transaction. The operator will not charge the customer but the bank will charge, Chugh said.
Why WLAs?
The basic purpose of setting up is to enhance the financial inclusion. A bank can save huge costs on account of setting up ATMs. On an average, a bank incurs a capital expenditure of around Rs 3-4 lakh per ATM buying. Additionally, operation costs come in the range of Rs 40,000-50,000 per month per ATM depending on certain factors like rent, security and electricity.
Point of Sales (PoS) terminals
Way back in June, 2009; RBI had allowed a maximum withdrawal of Rs 1,000 per day from PoS terminals using debit cards. However, the banking regulator so far did not observe rising demand for this facility.
"It (demand) is not picking. If the demand picks up, we will definitely have a relook to enhance the limit of Rs 1,000. Merchants probably don't advertise this facility. People don't know they can withdraw money from POS. If merchants put up some ad campaign people may take up for that," Chugh said.
RBI is also planning set 20 lakh PoS terminals next two years. To encourage cashless transaction it will focus more on internet-tele-mobile bankings.
NPCI initiative
RBI CGM was addressing a conference held by NPCI (National Payment Corporation of India) - an Indigenous payment gateway company, promoted by ten banks under the aegis of RBI. NPCI tied up with Discover Financial Services - a US based global payment services company to launch "Discover and Diners Club" cards in India.
"By June, we will also issue RuPay Global cards in association with four banks including Bank of Baroda , Canara Bank , UCO Bank and Saraswat Bank. Customers of those banks will be using those cards globally in all DFS networks," A P Hota, MD & CEO, NPCI said.
"So far, we have found 12 eligible candidates for setting up White Label ATMs. We are expecting one or two operators to be in business in the next few months. One of them is Tatas. Those all are non-bank corporate entities. In next three years 1.5 lakh such ATMs would be rolled out if all 17 become operational," he said.
What is White Label ATM (WLA)?
White Label ATM means an automated teller machine that does not have any label of any bank. Here, there are three inherent parties: the non-bank corporate entity, authorized ATM network operators/card payment network operators like RuPay, Visa or MasterCard and a sponsor bank for cash management, funds settlement as well as customer grievance redressal.
In June, 2012; the central bank had issued guidelines for setting up of White ATMs. It had designed three schemes to apply for the same. Each scheme has certain criteria considering banking coverage ranging from tier I tier VI cities and towns.
It is learnt that most of the applicants have applied for the scheme A which is 3:1 in favour of rural set-ups. This means, for every 3 WLAs installed in Tier III to VI centres, 1 WLA can be installed in Tier I to II centres. Out of the 3 WLAs installed in Tier III to VI centres, a minimum of 10 per cent should be installed in Tier V & VI centres.
Charges for WLAs would be as par the banking sector. It is Rs 15 per transaction. The operator will not charge the customer but the bank will charge, Chugh said.
Why WLAs?
The basic purpose of setting up is to enhance the financial inclusion. A bank can save huge costs on account of setting up ATMs. On an average, a bank incurs a capital expenditure of around Rs 3-4 lakh per ATM buying. Additionally, operation costs come in the range of Rs 40,000-50,000 per month per ATM depending on certain factors like rent, security and electricity.
Point of Sales (PoS) terminals
Way back in June, 2009; RBI had allowed a maximum withdrawal of Rs 1,000 per day from PoS terminals using debit cards. However, the banking regulator so far did not observe rising demand for this facility.
"It (demand) is not picking. If the demand picks up, we will definitely have a relook to enhance the limit of Rs 1,000. Merchants probably don't advertise this facility. People don't know they can withdraw money from POS. If merchants put up some ad campaign people may take up for that," Chugh said.
RBI is also planning set 20 lakh PoS terminals next two years. To encourage cashless transaction it will focus more on internet-tele-mobile bankings.
NPCI initiative
RBI CGM was addressing a conference held by NPCI (National Payment Corporation of India) - an Indigenous payment gateway company, promoted by ten banks under the aegis of RBI. NPCI tied up with Discover Financial Services - a US based global payment services company to launch "Discover and Diners Club" cards in India.
"By June, we will also issue RuPay Global cards in association with four banks including Bank of Baroda , Canara Bank , UCO Bank and Saraswat Bank. Customers of those banks will be using those cards globally in all DFS networks," A P Hota, MD & CEO, NPCI said.
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