RBI has relaxed business guidelines for White Label ATM operators

Companies that manage these machines can source cash directly from the RBI

• The Reserve Bank of India has allowed white-label ATM operators (WLAOs) to buy wholesale cash from the RBI and currency chests, source cash from any scheduled bank, and display advertisements pertaining to non-financial products or services within the WLA premises, among others.
• On a review of operations of WLAs and representations received from stakeholders, as also to enhance the viability of WLAs, it has been decided to allow them to buy wholesale cash, above a threshold of 1 lakh pieces (and in multiples thereof) of any denomination, directly from the Reserve Bank and currency chests against full payment.
• These companies are also being allowed to source cash from any scheduled bank, including cooperative banks and regional rural banks and to offer bill payment and Interoperable Cash Deposit services, subject to technical feasibility and certification by the National Payments Corporation of India (NPCI).

What is White Label ATM?

• White Label ATMs are operated by NBFC. NBFC need a bank sponsor to settles all issues related to cash management, transaction settlement with other banks etc for this ATM. The sponsor bank has to tie up with the other bank at the place where it is not present.
• The role of these NBFC is confined to acquisition of transactions of all banks’ customers by establishing technical connectivity with the existing authorized, shared ATM Network Operators / Card Payment Network Operators.
• Tata Communications Payment Solutions Limited (TCPSL) is the first company authorized by Reserve Bank of India (RBI) to open White Label ATMs in the country. It got launched under the brand name ‘Indicash’ on 27 June 2013. As on 31.2.2015, 11706 WLAs have been set up in India.
• Non-bank entities incorporated in India under the Companies Act 1956 are allowed to operate WLAs. In September 2015, Government permitted Foreign Direct Investment (FDI), up to 100%, under the automatic route. Before that, foreign investment in White Label ATMs, was being allowed only through government approval route.
• Non-bank entities are permitted to set up WLAs in India, after obtaining authorization from RBI under the Payment and Settlement Systems (PSS) Act 2007. Such non-bank entities should have a minimum net worth of Rs 100 crore as per the latest financial year audited balance sheet, which is to be maintained at all times.

Highlights of the New Norms of RBI

• The central bank elaborated that WLAOs can buy wholesale cash, above a threshold of one lakh pieces and in multiples there of any denomination, directly from its issue offices and currency chests against full payment.
• These operators can also source cash from any scheduled bank, including cooperative banks and regional rural banks.
• WLAOs can offer bill payment and interoperable cash deposit services, subject to technical feasibility and certification by the National Payments Corporation of India (NPCI).
• The operators can display advertisements pertaining to non-financial products or services anywhere within the WLA premises, including the WLA screen, except the main signboard.
• They have to ensure that the advertisements running on the screen disappear once the customer commences a transaction.
• 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 WLA operators.
• 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.

There are eight WLAOs in the country – AGS Transact Technologies Ltd, BTI Payments Pvt Ltd, Hitachi Payment Services Pvt Ltd, Muthoot Finance Ltd, RiddiSiddhi Bullions Ltd, SREI Infrastructure Finance Ltd, Tata Communications Payment Solutions Ltd, and Vakrangee Ltd.

Pic courtesy:www.jagran.com