White Label ATM

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Mains Paper 3: Economy | Mobilization of resources

From the UPSC perspective, the following things are important:

Prelims level: WLAs and other types of ATMs

Mains level: RBI guidelines for currency handling and cyber-security framework


News

  • The RBI has relaxed norms for white label ATM (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, the RBI said.

Who are the White Label ATM Operators?

  • Automated Teller Machines (ATMs) set up, owned and operated by non-bank entities are called WLAs.
  • They provide the banking services to the customers of banks in India, based on the cards (debit/credit/prepaid) issued by banks.
  • Non-bank entities that set up, own and operate ATMs are called “White Label ATM Operators” (WLAO).
  • The WLAO’s role is confined to acquisition of transactions of all banks’ customers by establishing technical connectivity with the existing authorized, shared ATM and Card Payment Network Operators.

Relaxed norms by RBI

  • The RBI has been decided to allow WLAs to buy wholesale cash, above a threshold of 1 lakh pieces (and in multiples thereof) of any denomination, directly from the RBI.
  • The RBI also permitted WLA operators to source cash from any bank, including cooperatives and regional rural banks.
  • They 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).
  • RBI has also allowed WLA operators to display advertisements pertaining to non-financial products or services anywhere within the WLA premises, including the ATM screen, except the main signboard.
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