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RBI issued Circular for Deployment of White Label Automated Teller Machines (WLAs) from Non-banks

The Reserve Bank of India (RBI) on 14 February 2012, issued the ‘Draft Circular for Deployment of White Label Automated Teller Machines (WLAs) from non-bank entities. The central bank also announced its plans. 

The central banks’d issuance of the draft reflected the bank’s intention to accelerate the growth and penetration of ATMs in the country. ATMs rolled out by non-banks will be like White Label ATMs (WLA) and will provide ATM services to customers of all banks. WLA means ATM owned, run and maintained by third parties on a contract basis from a financial institution.

The WLA operator can choose the location of the WLA. However, it will have to adhere to annual targets and the ratio of WLA between Tier I &II and Tier III-VI centres that may be stipulated by the RBI.

Non-bank entities proposing to set up WLAs have to apply to the RBI seeking authorisation under the Payment and Settlement Systems Act 2007. The non-banking entities should have a minimum net worth of Rs. 100 crore at the time of making the application and on a continuing basis after issue of the requisite authorisation.

Being non-bank owned ATMs, the guidelines on five free transactions in a month for using other bank ATMs will not be applicable for transactions made on the WLAs. The charges for the transactions have to be displayed on the screen before the customer initiates the transaction.

The WLA operator will have to declare one Sponsor Bank, which will serve as the Settlement Bank for the settlement of all the service transactions at the WLAs. The Sponsor Bank should be a member of one of the ATM networks authorised by the RBI and also be a member of the RTGS.

the primary responsibility to redress grievance of customers relating to failed ATM transactions will vest with the Card Issuing Bank. The Sponsor Bank will provide necessary support in this regard.

The RBI's directives on the time-lines for resolution of complaints of failed ATM transactions will also apply to transactions at the WLAs.

At present only banks are permitted to set up Automated Teller Machines (ATMs) in India. Banks have played a major role in encouraging ATM adoption and modifying behavioral strategies in the domain of personal banking. The banking space witnessed considerable growth through the ATMs, which currently stands 87000 nos. and has been restricted principally to the urban/metro areas.



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