Rules for non-bank ATMs

The Reserve Bank of India (RBI) today stipulated that non-bank entities wanting to establish automated teller machines — known as white label ATMs (WLAs) — must have a minimum net worth of Rs 100 crore.

It also set stiff targets in terms of how many such money dispensing machines need to be installed.

It may be recalled that the central bank had come out with draft norms on white label ATMs in February. Announcing the final guidelines today after seeking views from banks, public, ATM network operators and non-bank entities, the RBI said non-bank entities, known as white label ATM operators (WLAO), would have to maintain a net worth of Rs 100 crore at all times.

The apex bank said while the WLA operator was entitled to receive a fee from the banks for the use of ATM resources by the bank customers, they could not charge the customers directly for the use of WLAs. Further, the current guidelines on five free transactions in a month as applicable to bank customers for using other bank ATMs will be inclusive of the transactions effected at the WLAs.

While the authorisation for setting up a WLA operation will be initially for one year, the central bank set tough targets as regards the number of such machines that can be installed. Non-bank entities can choose from three schemes.

Under the first scheme, they will have to establish at least 1,000 WLAs in the first year. In the next year, the number will have to be at least twice those established in the first year. In the third year, it will have to be three times the number set up in the preceding year. For every three WLAs installed in tier III to VI centres, they will be allowed to establish one outlet in tier I and II centres.

According to the second scheme, a minimum of 5,000 WLAs will have to be installed every year for three years. Under the third scheme, the entity will have to set up at least 25,000 WLAs in the first year and at least another 25,000 in the next two years.

At present, only banks are permitted to set up ATMs.

According to the RBI, though there has been a 23-25 per cent year-on-year growth in the number of ATMs (over 90,000 now), they have been largely been deployed in Tier I and II centres.