Reserve Bank of India Issues New ATM Policies
Feb. 17 – To speed up the growth and penetration of ATMs across the country, the Reserve Bank of India has issued draft guiding principles for permitting non-banking entities to set up, own and operate such money dispensing machines. Non-banking entities proposing to establish such service will have a minimum net worth of Rs. 100 crore and they must apply to the RBI for authorization under the Payment and Settlement Systems Act (2007).
According to the RBI, ATMs will be in the nature of White Label Automated Teller Machines (WLAs) and will offer ATM services to customers of all banks.
The WLA operator can receive fees from the banks as acquirers for all transactions, but will not be permitted to charge customers.
RBI has also required views and comments on the draft circular from banks, authorized ATM network operators, non-bank entities and members of public in this regard up to the 6th of next month.
The banking sector has seen substantial development in ATMs during recent years with around 87,000 machines operational across the country; most of them operational in urban and metro areas.
The RBI has also permitted banks to open ATMs outside their branches without permission from the central bank.
A group would be constituted to review the existing framework of the branch authorization policy for providing greater elasticity and enhanced penetration.
According to branch authorization guidelines, banks are given permission to open, close and shift all categories of branches including ATMs at a time, normally once a year, and the sanction is valid for one year from the date of announcement.
Dezan Shira & Associates is a boutique professional services firm providing foreign direct investment business advisory, tax, accounting, payroll and due diligence services for multinational clients in India. For more information, please contact firstname.lastname@example.org, visit www.dezshira.com, or download the firm’s brochure here.