White label ATMs set to drive ATM spread in tier III to VI centres: Karad

New Delhi: White Label ATMs (WLAs) are expected to drive ATM spread across India with a greater focus on tier III to VI centres, said Union Minister of State for Finance, Bhagwat Kisanrao Karad, in a written reply in Rajya Sabha on Tuesday.

To expand ATM access in the country, the Reserve Bank of India (RBI) has granted permission to non-bank entities to establish, own, and operate White Label ATMs (WLAs) nationwide. This move is aimed at enhancing banking services‘ reach, especially in smaller towns and rural areas, and promoting financial inclusion.

Karad said that WLAs offer banking services to customers through cards issued by various banks, such as debit, credit, or prepaid cards. Apart from cash withdrawals, these ATMs provide an array of services, including account information, cash deposits, bill payments, mini/short statement generation, PIN changes, and requests for cheque books.

To ensure the viability and seamless functioning of WLAs, the RBI has undertaken several measures. Notably, through a circular issued on 30 December 2016, the central bank permitted White Label ATM operators (WLAOs) to source cash from retail outlets, addressing the challenges related to cash availability.

In another significant move, the RBI, through a circular on 7 March 2019, encouraged non-bank players‘ participation in the ATM industry by granting WLAOs several privileges. These include the direct purchase of wholesale cash from the Reserve Bank’s (issue offices) and currency chests, sourcing cash from scheduled banks, offering bill payment and Interoperable cash deposit services, displaying advertisements related to non-financial products/services, and permitting banks to issue co-branded ATM cards in partnership with authorized WLAOs, thereby extending the benefit of ’on-us‘ transactions to WLAs.

Additionally, the RBI introduced on-tap authorization for WLAs on 15 October 2019, streamlining the process for their establishment and operation.

At present, India has four authorized non-bank entities operating White Label ATMs, and their presence is expected to significantly enhance overall ATM penetration, especially in tier III to VI centres.

Addressing concerns related to consumer protection, Karad informed that from 1 April 2022 to 30 June 2023, the Consumer Education and Protection Department of RBI received a total of 98 complaints against WLAs. These complaints fall under the purview of Consumer Education and Protection Cells (CEPCs) of RBI, which meticulously assess each case based on its merits, supported by documentary evidence, and consider comments from the Regulated Entity (RE) while ensuring adherence to regulatory guidelines.