The Indian Finance Ministry has approved in principle allowing white-label ATMs, potentially resulting in more ATM deployments in rural parts of the country, according to local media reports.
All ATMs in India now either are owned by banks or are leased by them to ATM service providers. However, service providers own and manage white label ATMs exclusively, and the machines are open to all consumers, regardless of where they bank.
An official with a Mumbai-based ATM service provider tells PaymentsSource on the condition of anonymity that his ministry has acknowledged the need for white-label ATMs. For now, the approval is only in principle, and the Finance Ministry is expected to forward its view to the Reserve Bank of India, which historically has shunned white-label ATM deployments, he says.
“But the central bank has given its nod to brown-label ATMs, where the ATM is owned and managed by the service provider but a bank has the right to brand the ATM as its own,” the official says, indicating that the central bank may soften its stance.
Brown-label machines are a growing trend in India, where a change in rules has resulted in more banks outsourcing ATMs to service providers as a cost-effective way to increase deployments in rural India.
Indian banks deploy about 75,000 ATMs, but they are unable to cover even 50% of the country’s population, a major portion of which lives in smaller towns and villages, according to data from the Reserve Bank of India. At least twice that number of ATMs still is needed to provide a majority India’s population access to the machines, the central bank contends.
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