Muthoot Finance launched its first White-Label ATM

February 9, 2014

Screenshot_3 Indian gold loan company, Muthoot Finance Ltd became the first and only Non-Banking Finance Company (NBFC) to have obtained license for setting-up WLAs in India. The Muthoot Group launched its first White-Label ATM at its corporate office in New Delhi and has plans to invest Rs 300 crore in the next three years. The rollout will be mainly in tier-3 and tier-4 cities.

Goal: To set-up 9,000 WLAs over three years – 1,000 in the first year, 2,000 in the second year and 6,000 in the third.
Partner of Muthoot Finance to set up WLAs: FIS Payment Solutions Services.
Sponsor Bank for WLAs venture: Federal Bank.

The ATMs will be user-friendly, even to the differently-abled – equipped with Bio-metric thumb & voice-recognition.
The other entities that are offering White label ATMs:

Prizm Payment Services, a unit of Hitachi of Japan set up its first White Label ATM “Money Spot ATM” at Chendre village in Alibaug Taluk, Raigad district of Maharashtra on January, 2014;
Tata Communications Payment Solutions launched the India’s first ever network of white label ATMs called “Indicash” in June 2013 at Chandrapada in Thane district of Maharashtra.

What are White label ATMs?

ATMs set up and run by non-banking entities are called White Label ATMs (WLAs). Customers from any bank can deposit or withdraw money from such ATMs. They will provide ATM services to customers of all banks. In June 2012, the Reserve Bank of India (RBI) has permitted non-banking companies to set up ATMs, referred to as WLAs, to increase the penetration of the facility across the country.
Objective of permitting non-banks to operate WLAs: To enhance the penetration of the machines in semi-urban and rural areas, where bank-run ATMs are a few or none. The move is in line to the governments objective of achieving financial inclusion.
Excerpts of the RBI’s policy to set up & operate White label ATMs:

Non-bank entities would be permitted to set up WLAs in India, after obtaining authorisation from RBI under the Payment and Settlement Systems (PSS) Act 2007.
As per the Payment and Settlement Systems Act 2007, the non bank entities should have a minimum net worth of Rs 100 crore & have to apply to RBI for seeking approval.
Every WLA operator is required to tie up with a sponsor bank, which takes care of cash operations, dispute resolution and regulatory reporting aspects.
Being non-bank owned ATMs, the guidelines on five free transactions in a month for using other bank ATMs would not be applicable for transactions affected on the WLAs.
WLA operators can also earn extra revenue through advertisements and value-added services. Further, it allows autonomy of operators on deciding locations and creating their own brand with fixed annual targets mandated by RBI.

White-label ATMs accepts only cards issued by banks and does not accept cash deposits.

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