The first White Label ATM (owned by a non-bank entity) opened in Maharashtra today.
Tata Communications Payments Solutions Ltd, a wholly owned subsidiary of Tata Communications Ltd, which unveiled the ATM at Chandrapada in Thane district, plans to roll out 15,000 such ATMs by 2016.
In a communication to the stock exchanges, Tata Communications, said its subsidiary unveiled Indicash (a combination of words 'India’ and 'cash’) which it described as the country’s "first ever network" of WLAs that seeks to meet the RBI's vision of increasing the ATM penetration across India.
According to Srinivasa Addepalli, Chief Strategy Officer, Tata Communications, compared to many other nations, India was an "underpenetrated ATM market". It has only 98 ATMs per million people as against 1,390 in the US, 530 in the UK, and 211 in China. He said Tata Comm Payments would play a pivotal role in installing white label ATMs in the country. The roll out was backed by Tata Comm's "highly resilient and reliable infrastructure as well as managed services expertise".
Sanjeev Patel, CEO, Tata Comm Payments, said his company was managing a contracted 27,000 ATMs for banks in India and the goal was to roll out 50,000 ATMs by 2016. He said Indicash would help offer a "safe and user-friendly" banking experience.
The release said that Indicash was designed based on consumer research conducted by Tata Comm Payments that showed cards being drawn back by the machines, short dispensation of cash, lack of privacy etc as some of the prime concerns of customers mainly in tier 3-6 locations. The Indicash machines would not swallow the cards and come equipped with several features to ensure safety of transactions.
The consumers would be offered a range of cash and non-cash services like cash withdrawals, balance enquiries, mini-statements and PIN change. It would also accept all domestic debit cards and the first five transactions per month would be free in line with the RBI regulations covering use of "other bank ATMs".
The company said it plans to deploy 15,000 Indicash ATMs in three years, with 67 per cent of them in semi-urban and rural locations while the rest would be installed in metro and urban markets. In the second phase of the roll out, the customers would be offered value-added and utility services and the company would liaise with national and regional banks in its roll out plans.
The country’s apex bank, while enunciating the policy of white label ATMs in February 2012, pointed out that till then only banks were permitted to install ATMs in the country. But these were largely focused on urban/metro areas with tier III to VI unbanked/under banked areas not witnessing much penetration.
The RBI said that though there has been around 30 per cent year-on-year growth in their number since 2008, on a per capita basis ATM penetration in India was low compared to other nations. Hence, it decided to allow non-banks to set up, own and operate ATMs to speed up the reach of ATMs which would be in the nature of White Label ATMs, covering customers of all banks.
The RBI specified that the non-bank entities wanting to set up ATMs should have a minimum net worth of Rs 100 crore both at the time of applying for authorisation and on a `continuing basis subsequent to permission being granted.