The Reserve Bank of India (RBI) has been actively taking strides to promote greater ATM access, particularly in Tier III to VI centres. Non-bank companies have been given the green light to establish, own and operate White Label ATMs (WLAs), thereby providing a plethora of banking services to customers dependent on cards issued by banks. The RBI has enforced measures to enhance their viability as well as their functioning. Presently, there are four approved non-bank entities that operate White Label ATMs across the nation.
Understanding White Label ATMs (WLAs)
White Label ATMs (WLAs) refer to ATMs set up, owned, and operated by non-banking entities. These non-bank ATM operators gain authorisation under the Payment & Settlement Systems Act, 2007 by the RBI. They offer a variety of banking services to customers, utilising debit/credit/prepaid cards issued by banks. In addition to cash dispensing, WLAs provide services such as account details, cash deposit, bill payment, mini statements, cheque book requests and PIN change.
Boosting WLA Presence and Functionality
There are several measures employed by the RBI designed to strengthen the presence and functionality of WLAs. One such measure is the introduction of cash sourcing flexibility, which allows WLAs to source cash from retail outlets to overcome cash sourcing issues encountered post demonetization. Additionally, WLA operators have the liberty to purchase wholesale cash directly from RBI and currency chests, and source cash from any scheduled bank, including Cooperative Banks and Regional Rural Banks.
Extended Services and Partnerships
RBI’s efforts to expand WLA reach and increase revenue streams are further augmented by allowing WLAs to offer bill payments and interoperable cash deposit services. WLAs are also permitted to advertise non-financial products/services and collaborate with banks to issue co-branded ATM cards. These strategies aim at attracting a broader clientele and enhancing the accessibility of banking services in underserved areas.
Streamlining WLA Establishment
Furthermore, RBI’s introduction of on-tap authorisation for WLAs encourages increased participation by non-bank players in the ATM industry, thereby streamlining the process of WLA establishment while promoting healthy competition.
Addressing Customer Grievances and Protection
The Consumer Education and Protection Department of RBI promptly addresses grievances against WLAs. Between April 2022 and June 2023, they received and handled a total of 98 complaints via the Consumer Education and Protection Cells (CEPCs) of RBI. The RBI has also launched several initiatives to promote education and financial literacy, including the National Strategy for Financial Education (NSFE) 2020-2025.
Diverse Types of ATMs
The variety of ATMs can cater to distinct needs. Aside from WLAs, there are Brown Label ATMs, where the hardware and machine lease are owned by a service provider, but cash management and connectivity to banking networks are serviced by a sponsoring bank. Orange Label ATMs cater to share transactions for investors and traders involved in buying and selling stocks and securities. Yellow Label ATMs deal with e-commerce transactions, while Pink Label ATMs are dedicated to women customers’ safety and convenience, monitored by guards to ensure exclusive female access. Last but not least, Green Label ATMs cater to agricultural transactions, primarily serving farmers and rural customers.
