White label ATMs set to drive ATM spread in tier III to VI centres: Karad
New Delhi: The expansion of White Label ATMs (WLAs) is expected to drive ATM penetration across India, with a particular emphasis on tier III to VI centres, according to Union Minister of State for Finance, Bhagwat Kisanrao Karad. The minister made this statement in a written reply during a session in Rajya Sabha on Tuesday.
White Label ATMs are those ATMs that are owned and operated by non-banking entities authorized by the Reserve Bank of India (RBI) to provide banking services to customers. These ATMs play a crucial role in extending banking services to underserved and remote areas, including tier III to VI centres, where traditional bank branches may not be present.
By focusing on tier III to VI centres, the government aims to enhance financial inclusion in these regions and improve access to banking services for residents. This move is expected to boost economic activities, encourage digital transactions, and facilitate financial empowerment for individuals and businesses in these areas.
The expansion of White Label ATMs is a part of the government’s broader efforts to promote digital banking and financial inclusion in the country. By leveraging technology and non-banking entities to provide ATM services, the government aims to bridge the gap between urban and rural areas in terms of access to banking facilities.
As White Label ATMs continue to spread across India, it is expected to bring convenience and ease of banking to a wider population, especially in smaller towns and rural regions. The move aligns with the government’s vision of a digitally empowered and financially inclusive India, where all citizens can access modern banking services and participate in the country’s economic growth.
To expand ATM access and promote financial inclusion in the country, the Reserve Bank of India (RBI) has taken a significant step by granting permission to non-bank entities to establish, own, and operate White Label ATMs (WLAs) nationwide. White Label ATMs are owned and operated by non-banking entities authorized by the RBI to provide banking services to customers.
This move is a part of the RBI’s efforts to enhance the reach of banking services, particularly in smaller towns and rural areas, where traditional bank branches may be limited. By allowing non-bank entities to set up and run ATMs, the RBI aims to improve accessibility to banking facilities in underserved regions and promote financial inclusion among the population.
The expansion of White Label ATMs is expected to have a positive impact on various aspects of banking services in India. It will bring convenience and ease of transactions to people in areas with limited banking infrastructure. Additionally, it will facilitate digital transactions and boost economic activities in these regions.
Moreover, White Label ATMs can help drive financial literacy and encourage the adoption of digital banking among individuals who may not have had access to such facilities before. By extending banking services to more parts of the country, the RBI’s initiative is aligned with the government’s vision of creating a digitally empowered and financially inclusive India.
Overall, the RBI’s decision to allow non-bank entities to establish White Label ATMs nationwide is a significant step towards achieving the goal of providing banking services to every corner of the country and empowering all citizens to participate in the formal financial system. Union Minister of State for Finance, Bhagwat Kisanrao Karad, highlighted that White Label ATMs (WLAs) offer a wide range of banking services to customers through various types of cards issued by different banks. These cards include debit cards, credit cards, and prepaid cards.
Besides the standard cash withdrawal service, White Label ATMs provide customers with comprehensive banking services. Some of these services include:
- Account Information: Customers can inquire about their account balance, recent transactions, and other relevant account details.
- Cash Deposits: WLAs allow customers to deposit cash into their accounts, providing them with the convenience of making deposits without visiting a bank branch.
- Bill Payments: Customers can use WLAs to pay their utility bills, mobile bills, and other bills, offering them a one-stop solution for bill payments.
- Mini/Short Statement Generation: WLAs enable customers to request and obtain a concise summary of recent transactions and account activity.
- PIN Changes: Customers can change their ATM PINs at White Label ATMs for enhanced security and convenience.
- Requests for Cheque Books: WLAs facilitate customers in requesting new chequebooks, streamlining the process for chequebook issuance.
These comprehensive services provided by White Label ATMs contribute significantly to enhancing banking accessibility and convenience for customers across various regions in India. The availability of these services at WLAs helps promote financial inclusion by making banking facilities easily accessible to people in areas with limited access to traditional bank branches.
WLAs extend the reach of banking services to rural and remote areas, enabling a larger population to participate in the formal financial system. By offering a diverse range of services beyond cash withdrawals, White Label ATMs play a crucial role in driving digital banking adoption and financial literacy among individuals from different backgrounds. To ensure the viability and smooth operation of White Label ATMs (WLAs), the Reserve Bank of India (RBI) has implemented various measures. A significant step taken by the RBI was through a circular issued on 30th December 2016, wherein the central bank permitted White Label ATM operators (WLAOs) to source cash from retail outlets.
This measure aimed to address the challenges related to cash availability at White Label ATMs. By allowing WLAOs to source cash from retail outlets, they were provided with an additional avenue to replenish ATMs with cash. This move was particularly beneficial in areas where the traditional banking infrastructure might not be easily accessible or cash replenishment by banks might be infrequent.
The ability to source cash from retail outlets ensured a more steady supply of cash for WLAs and contributed to the expansion of ATM coverage in regions with limited banking facilities. As a result, WLAs could be strategically placed in tier III to VI centres and rural areas, contributing to the government’s goal of enhancing financial inclusion and providing banking services to underserved communities.
Additionally, by facilitating cash sourcing from retail outlets, the RBI’s measures aimed to improve the operational efficiency of WLAs. It offered WLAOs an alternative channel to manage the cash logistics for ATMs, reducing their dependence on traditional bank cash supply mechanisms.
Overall, the RBI’s decision to permit White Label ATM operators to source cash from retail outlets played a crucial role in promoting the growth and effectiveness of WLAs in extending banking services to a wider population. These measures further strengthened the overall ATM network in India and contributed to the efforts towards a digitally empowered and financially inclusive nation.
In a notable development, the Reserve Bank of India (RBI) took a significant step on 7th March 2019 to encourage non-bank players’ active participation in the ATM industry. The RBI granted White Label ATM operators (WLAOs) several privileges to promote their role in extending banking services to a wider population. These privileges aimed to enhance the viability and functionality of WLAs, furthering the goal of financial inclusion in India.
The privileges granted to White Label ATM operators by the RBI include:
- Direct Purchase of Wholesale Cash: WLAOs were permitted to directly purchase wholesale cash from the Reserve Bank’s issuing offices and currency chests. This enabled them to manage their cash logistics more efficiently and maintain a steady supply of cash for ATMs.
- Sourcing Cash from Scheduled Banks: WLAOs were allowed to source cash from scheduled banks, providing them with additional options to replenish ATMs and ensuring cash availability in remote and underserved areas.
- Bill Payment and Interoperable Cash Deposit Services: The RBI encouraged WLAOs to offer bill payment and interoperable cash deposit services. This move expanded the range of services available at WLAs, making them more convenient and useful for customers.
- Displaying Advertisements: WLAOs were permitted to display advertisements related to non-financial products and services at ATMs. This provided a source of revenue for WLAOs and supported their financial sustainability.
- Co-branded ATM Cards: Banks were allowed to issue co-branded ATM cards in partnership with authorized WLAOs. This extended the benefit of ‘on-us’ transactions to WLAs, making them more attractive and accessible to customers.
By granting these privileges, the RBI aimed to create a conducive environment for non-bank players to actively participate in the ATM industry and contribute to expanding the reach of banking services. These measures supported the growth of White Label ATMs and their role in bringing banking services to underserved regions, especially in tier III to VI centres and rural areas.
Overall, the RBI’s circular on 7th March 2019 demonstrated the central bank’s commitment to promoting financial inclusion and leveraging technology to enhance banking accessibility for all segments of the population. The privileges offered to White Label ATM operators aimed to strengthen the ATM network in India and advance the vision of a digitally empowered and financially inclusive nation.
On 15th October 2019, the Reserve Bank of India (RBI) took another significant step to streamline the establishment and operation of White Label ATMs (WLAs) by introducing on-tap authorization. This move aimed to simplify and expedite the process for granting authorization to non-bank entities to operate WLAs.
The introduction of on-tap authorization made it easier for interested non-bank entities to apply for authorization to set up and run White Label ATMs. With a simplified and more efficient authorization process, the RBI aimed to encourage more non-bank players to participate in the ATM industry and extend banking services to underserved regions, particularly tier III to VI centres.
As of now, India has four authorized non-bank entities operating White Label ATMs. These entities are crucial in enhancing overall ATM penetration in the country, especially in areas where traditional bank branches may be limited or inaccessible. By strategically placing WLAs in these underserved regions, the ATM network’s coverage is expanded, promoting financial inclusion and making banking services more accessible to a larger population.
The presence of authorized non-bank entities operating White Label ATMs is expected to have a significant impact on banking accessibility in rural and remote areas. With WLAs offering a wide range of services beyond cash withdrawals, including cash deposits, bill payments, and more, customers in these regions can avail various banking facilities conveniently.
The combination of on-tap authorization and the privileges granted by the RBI to WLAOs have created a favourable environment for non-bank players to contribute actively to the ATM industry and support the nation’s efforts towards digital and financial inclusion. As WLAs continue to extend their reach in tier III to VI centres and other underserved areas, they play a crucial role in achieving the vision of a digitally empowered and financially inclusive India.
Addressing concerns related to consumer protection, Union Minister of State for Finance, Bhagwat Kisanrao Karad, provided information on the complaints received against White Label ATMs (WLAs). According to Karad, the Consumer Education and Protection Department of the Reserve Bank of India (RBI) received a total of 98 complaints against WLAs from 1st April 2022 to 30th June 2023.
These complaints are within the purview of the Consumer Education and Protection Cells (CEPCs) of RBI. The CEPCs meticulously assess each case based on its merits, considering documentary evidence and comments from the Regulated Entity (RE) associated with the WLA while ensuring adherence to regulatory guidelines.
By addressing complaints and concerns related to White Label ATMs, the RBI aims to safeguard consumer rights and protect their interests while using banking services provided by WLAs. The Consumer Education and Protection Department plays a crucial role in ensuring that any issues or grievances raised by consumers are appropriately handled and resolved.
The RBI’s focus on consumer protection is aligned with its broader objectives of promoting a secure and customer-friendly banking environment. By addressing complaints about WLAs and other banking services, the RBI reinforces its commitment to ensuring transparency, accountability, and consumer satisfaction in the financial sector.
As White Label ATMs continue to expand their reach in different regions, it becomes essential to maintain a robust framework for consumer protection and redressal of grievances. The RBI’s efforts to address complaints against WLAs foster trust and confidence in the banking system and promote a positive customer experience in using these ATMs for their financial transactions.
