RBI to bring in more White Label ATMs

BE/RBINOTE/43/2019

Reserve Bank of India (RBI) has proposed some measures to strengthen White Label ATMs (WLA).   All of us are aware that there are two types of ATMs viz.,

• One is that are regulated and managed by banks and
• The others are dubbed as white label ATMs.
• In the recent days, WLAs have drawn the attention of RBI, paving way for setting up new set of norms.
• Due to this we can expect more WLA services around our neighbourhood.
• RBI is going to permit a new method for granting permission to run these ATMs.
• Apart from this, even billers and traders will also get a major boost.
• This means, a customer can use his debit cards, credit cards and prepaid cards as permitted by the issuer on WLAs.

Brief from RBI Governor:

1. RBI Governor, along with MPC members, took several measures for boosting retail payment systems in its third bi-monthly monetary policy for FY20
2. The Development Note of RBI reads that in order to benefit from diversification of risk as also to encourage innovation and competition, it has been decided to offer ‘on tap’ authorisation to entities desirous to function/operate/provide platforms. These platforms are White Label ATMs (WLA) including Bharat Bill Payment Operating Unit (BBPOU) and Trade Receivables Discounting System (TReDS).
3. RBI had been planning to give more permissions to launch WLA since last year and the development was first announced in June 2018 policy.
4. RBI also launched a policy paper on January 21, 2019, for public consultation on minimising concentration risk in retail payment systems from a financial stability perspective.
5. The RBI along with MPC members in its third bi-monthly monetary policy for FY20, took a host of measures for boosting retail payment systems announced recently.
6. RBI said in its development note that, in order to benefit from diversification of risk as also to encourage innovation and competition, it has been decided to offer ‘on tap’ authorisation to entities desirous to function/operate/provide platforms. These platforms are White Label ATMs (WLA) including Bharat Bill Payment
7. Operating Unit (BBPOU) and Trade Receivables Discounting System (TReDS).
8. RBI has been planning since 2018, to provide more permissions to launch WLA and the development was first announced in June 2018 policy.
9. RBI also launched a policy paper on January 21, 2019, for public consultation on minimising concentration risk in retail payment systems from a financial stability perspective.

FEEDBACK

• After receiving feedback, RBI said, “Comments/feedback received from a wide array of individuals, public and private entities, institutions and industry associations suggested the need to encourage more players to participate in and promote PAN India payment platforms.”
• Hence, ‘on tap’ authorisation will soon be given to companies and others who desire to open WLA.
• Instructions to this effect will be issued by the end of September 2019.
• For customers, WLAs are similar to normal bank ATMs, except that the acceptance of cash deposits and a few value added services are not permitted by RBI.
• This move of RBI in allowing non-bank entities to set up WLA is just to increase the geographical spread of ATM which in-turn is expected to enhance customer services especially in rural areas.

SERVICES OFFERED BY WLAs:

Services offered by WLA are

• Account information,
• Mini/short statement generation,
• Cash withdrawals and PIN change.

Here, WLA does not provide services like

• Cash Deposits,
• Regular bills payments and
• Purchase of re-load vouchers for mobiles.
• Services offered by Bank ATMs which are:
  • Personal loan application,
  • Payment of Taxes
  • Railway ticket booking,
  • Fixed Deposits investment,
  • Mutual funds investment,
  • Feeding Aadhaar card details,
  • Mobile recharge,
  • e-verification of ITR and
  • Cardless cash withdrawal

Note: Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called “White Label ATMs” (WLAs). They provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks.