RBI Permits 4 Non-bank Entities to Set up WLAs - The New Indian Express

RBI Permits 4 Non-bank Entities to Set up WLAs

Published: 08th February 2014 06:00 AM

Last Updated: 08th February 2014 01:32 AM

The Reserve Bank of India (RBI) has authorised four non banking entities to launch white label automated teller machines (WLAs) including Vakrangee Limited of Mumbai, Muthoot Finance of Kochi, Prizm Payment Services of Mumbai and Tata Communications Payment Solutions Ltd of Mumbai.

The RBI on Friday said that Vakrangee is likely to kick off its white label ATMs shortly while the other three operators have already launched their services.

Recently, Muthoot Finance announced that it was looking at setting up 9000 WLAs in a three-year time-span - 1,000 in the first year; 2,000 in the second year and an additional 6,000 in the third year.

The company has planned to set up 100 ATMs in the next 3 months - 50 in southern states and 50 in north, east and west India, it added. The non banking finance company opened its first WLA in New Delhi in February this year.

Reports indicate that Vakrangee also plans to set up 15,000 ATMs in three years’ time.

The RBI said that in June 2012, it issued policy guidelines allowing non-banking entities to set up and operate WLAs after seeking the central bank’s authorisation under the Payment and Settlement Systems Act 2007. Before this only banks were allowed to set up ATMs in India.

Banking sources said that while several operators had showed interest in running WLAs so far progress had been slow. However, recently operators had evinced interest in ramping up the launch of these ATMs and announced ambitious plans to expand.

Commenting on its decision on WLAs, Reserve Bank said, the primary objective of allowing non-banks to operate WLAs was to enhance the spread of ATMs in semi-urban and rural areas (mainly in tier III to VI areas), where bank-owned ATM penetration was not growing.

 Under the new guidelines, certain minimum number of WLAs need to be installed in these areas within a year as per the scheme opted by the respective operator, it added.

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