RBI to permit non-banking entities to set up ATMs

Mumbai: In a bid to accelerate the growth and penetration of ATMs in the country, the Reserve Bank of India on Tuesday said it plans to permit non-banking entities to set up, own and operate ATMs.

ATMs rolled out by non-banks will be like White Label ATMs (WLA) and will provide ATM services to customers of all banks, the RBI said in its Draft Guidelines for WLAs.

Non-bank entities proposing to set up WLAs have to apply to the RBI seeking authorisation under the Payment and Settlement Systems Act 2007. Such 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.

'Sponsor Bank'
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.

While 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.

The WLA operator can choose the location of the WLA. However, it will 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.