Indian corporates have lined up plans to roll out ATMs, a year after the RBI gave its nod to non-banking companies to set up ATMs.
First off the block, Tata Communications Payment Solutions (TCPL), a wholly-owned subsidiary of Tata Communications, plans to set up 15,000 ATMs in India under the brand name, Indicash.
The company, after launching its initiatives in Maharashtra, has set its eyes on Karnataka.
“In the next three years, we will launch 1,000 ATMs in Karnataka, with a thrust on rural areas,” Sanjeev Patel, CEO, TCPL, told
TCPL may be the first off the block but others are hot on their heels.
Muthoot Finance, engaged in the business of financing against the security of gold ornaments, wants to leverage its network of 3,853 branches to set up white-label ATMs - industry parlance for non-banking entities launching their branded ATMs, but using the RBI-mandated National Financial Switch network. Srei Infrastructure Finance has received in-principle approval from the apex bank to set up such ATMs.
Semi-urban, rural areas
The reason for companies wanting to get into this segment is largely due to the fact that despite banks setting up ATMs averaging a growth of 23-25 per cent, the deployment has been primarily in Tier-1 and Tier-2 cities, said a tech analyst. This leaves the semi-urban and rural areas without access to services, such as ATMs, he added.
However, for companies, such as TCPL, a successful roll-out of ATMs would give its parent, the Tata Group, an advantage to bag a banking licence, say industry watchers. In July, Tatas were among 26 Indian corporate houses which applied for banking licences. London-based RBR, a research and consulting firm, in a report said India’s ATM density is 74 per million people and 48 per $1 billion of GDP, way below other BRIC countries, which on an average, have 246 ATMs per million people.