White Label ATMs (WLAs)

Context:

  • The Reserve Bank Of India (RBI) has come up with a review of operations of White Label ATMs (WLAs) in the country.

More details:

  • The bank noted that according to the representations received from stakeholders and also to enhance the viability of WLAs, it has been decided to allow the WLA Operators to buy wholesale cash, above a threshold of 1 lakh pieces (and in multiples thereof) of any denomination, directly from the Reserve Bank (Issue Offices) and Currency Chests against full payment.
  • The central bank has also allowed the operators to source cash from any scheduled bank, including Cooperative Banks and Regional Rural Banks.
  • The RBI has further allowed operators to offer bill payment and Interoperable Cash Deposit services, subject to technical feasibility and certification by National Payments Corporation of India (NPCI).
  • The display advertisements pertaining to non-financial products / services anywhere within the WLA premises, including the WLA screen, except the main signboard has also been allowed. However, the bank noted that it shall be ensured that the advertisements running on the screen disappear once the customer commences a transaction.
  • The permission to WLA Operators to source cash from retail outlets, accorded vide circular dated December 30, 2016, stands repealed. Banks may issue co-branded ATM cards in partnership with the authorised WLA Operators and may extend the benefit of ‘on-us’ transactions to their WLAs as well.
  • All guidelines, safeguards, standards and control measures applicable to banks relating to currency handling, and cyber-security framework for ATMs, shall also be applicable to the WLA Operators.

What is White label-ATM?

  • 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.
  • Keeping the fact in view that banks won’t be able to provide their ATM facilities in each and every place, non-bank entities were allowed by the RBI to set up White Label ATMs. This was done to increase the geographical spread of ATMs and enhance the customer service.
  • Non-bank entities shall commence setting up and operating WLAs only after it has been authorised to do so by the RBI under the Payment and Settlement Systems Act, 2007.
  • Taking over of ATMs operated by banks would not be permitted. Entities may ensure to draw a strategic plan for installation of such WLAs based on the criteria set during authorization. White Label ATM Operators (WLAO) may also indicate the value added services it proposes to offer at the WLA while seeking authorisation.
  • WLAO is permitted to have more than one Sponsor Bank. All the transactions of WLAs serviced by this Sponsor Bank would be settled through it.
  • Cash Management at the WLAs will be the responsibility of the Sponsor Bank, who may if required, make necessary arrangements with other banks for servicing cash requirements at various places.
  • WLAO may establish connectivity with any of the authorised ATM Network Operators/ Card Payment Network Operators and ensure that the settlement of all the transactions at the WLAs shall be done only in the books of the Sponsor Bank through the ATM Network Operators/ Card Payment Network Operators with whom the WLAO has established connectivity.
  • Maintenance and servicing of the WLAs shall be the sole responsibility of the WLAO.

Source: TH & Wiki