NEWS & ADVICE : SAVINGS ACCOUNTS
RBI issues guidelines for non- bank ATM
By Neelima Shankar
Jun 21, 2012
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Non Bank entities can now open their Automated Teller Machines (ATMs) in near future. This comes after the central bank has issued the guidelines for such ATMs. This is to increase the penetration of the ATM services to the smaller cities and towns across the nation.

The RBI has called such ATMs as white label ATMs (WLA) and the nonbanking entities as white label ATM operators (WLAO). The banking regulator has also given set of rules for rolling out of WLAs.

The WLAOs will have to plan out their ATM roll out in three year scheme; atleast 1000 ATMs set up in first year. At least twice the numbers of ATMs set up in first year, and finally install three times the ATMs set up in second year or more. The scheme equates one ATM in Tier I and II cities to three ATMs in Tier III to Tier VI centers.

Another scheme suggests bank open 5000 ATMs every year for three years. Under this scheme, each ATM installed in Tier I and Tier II center equals two ATMs in Tier III to Tier VI centers. The third and final scheme suggests WLAO setting up at least 25000 ATMs in first year and another 25000 in next two years, while in this case one ATM in Tier I and Tier II center equals that installed in Tier III to Tier VI centers.

RBI also mandated atleast 10% of the WLAs of the Tier III to Tier VI category are installed in Tier V and Tier VI centers.

The window for seeking authorization from RBI is four months from issuing of the guidelines. Also, only domestic ATMs could be used in white label ATMs.

The move comes from RBI as a concern over low density of ATM growth in Tier III to Tier VI centers.


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