Coming soon in your area: ‘Pay and use’ ATMs

• Pay And Use’ ATMs
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  A customer uses his card to withdraw money from an ATM in Jammu October 14, 2008. REUTERS/Amit Gupta /Files

Accessing automated teller machines (ATMs) especially those located in far-flung areas, will soon be a thing of the past with the Reserve Bank of India (RBI) allowing non-bank entities to own and operate ATM networks across the country. It comes as a boon for account holders staying in rural and semi- urban areas.

White Label ATMs (WLAs), popular in developed countries, will be rolled out soon by the corporate sector.

RBI has sought views of banks whose ATM cards would be accepted at WLAs.

“RBI has reviewed the extant policy on ATMs and it has been decided to permit non- banks to set up, own and operate ATMs to accelerate growth and penetration of ATMs in the country. Such ATMs will be in the nature of White Label ATMs and would provide services to customers of all banks,” the RBI said.

Unlike ATMs, WLAs are not owned by individual banks. Any corporate non-bank entity can set up WLAs after getting RBI’s approval.

Customers of any bank can use such ATMs but they will have to pay a fee for availing services. Guidelines on maximum five free transactions in a month for using ATMs of other banks will not be applicable for transactions done through WLAs.

According to RBI data, there are about 87,000 ATMs in India and most are owned and operated by banks concentrated in metros and tier- one cities. Since 2008, ATMs have been growing at 30 percent annually. RBI intends to raise the number of ATMs so that people in nook and corner can have access to ATMs.

“To start with, only cards issued by banks could be used at WLAs. Acceptance of deposits at the WLA site into the account of the WLA operator indicated by it shall not be permitted,” RBI said. RBI’s directives on deadline for resolution of complaints of failed ATM transactions will also apply to transactions at WLAs. Many corporate, including Tatas, Reliance, M& M and L& T, are believed to be applying for WLA licence, which are expected to be issued after March.

RBI’s objective is to radically expand the reach of banking services and to significantly increase the number of ATMs by involving the corporates to invest in such ventures.

The WLA operator must have a minimum net worth of Rs 100 crore and needs to declare one Sponsor Bank, which will serve as the settlement bank to settle all service transactions at WLAs.

The primary responsibility to redress any customer complaint related to failed ATM transactions will rest with the issuing bank with support to be given by the sponsor bank.

The WLA operator can choose the location of the WLA but it will have to adhere to annual targets and the ratio of WLA between tier one and two, and tier three and four locations.

Reproduced From Mail Today. © 2012. MTNPL. All rights reserved.